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AIMODELSTRATEGY
FORENTERPRISES
Choosingtherightmodelandmakingitwork
October2026
ImplicationsofAIModelChoicesfortheEnterprises2
TABLEOFCONTENTS
Foreword 3
Insightsbyte 4
Thechallenge 4
AImodellandscape 5
Comparisonofmodelapproaches 6
Capabilitiesofdifferentmodeltypes 7
Enterpriserequirementsfordeploymentandoperation 9
Costcomponents 11
Matchingmodelstoenterprisecontexts 15
Implicationsforindia 18
TheBottomLine 19
ImplicationsofAIModelChoicesfortheEnterprises3
FOREWORD
EnterpriseAIadoptionisenteringadecisivephase.Thefocushasshiftedfromexperimentationtodeterminingwhichmodelsanddeploymentapproachesbestserveorganizationalneeds.TheeconomicsandrisksofAIdeploymentnowgofarbeyondmodelpricing.Theyincludedataintegration,infrastructure,security,governance,operationalcomplexityandthecapabilitiesrequiredtomanagethem.
Inthisenvironment,leadersmustcraftstrategiesthatbalancetrade-offsacrosscapability,control,customisation,security,infrastructureandcost,whileorchestratingmodelstofitspecificworkloads.Thechallengeisnolongerjustselectingamodel,butensuringitisdeployedeffectively.
ForIndia,thisenvironmentpresentsauniqueopportunity.Byleveragingitsscale,linguisticdiversity,digitalpublicinfrastructureandtechnologycapabilities,thecountrycancreateanIndiaAIStack–aninteroperablelayerofmodels,infrastructureandservicesthatbringstogetherIndia-specificdatasets,sharedcompute,evaluationinfrastructureandopeninterfaces.Suchastackwouldenableaffordable,multilingualAIdeploymentacrossindustriesandpositionIndiaasaprominentplayerinenterpriseinnovation.
AtNasscom,webelievethatAIsuccesswillrestontwofundamentals:theabilitytomaketherightmodelchoicesandthecapacitytoadaptthemcontinuouslyastechnology,economicsandbusinessneedsevolve.Together,theseelementsarecrucialtobuildinggloballycompetitive,trustedandeconomicallysustainableAIenterprisesfromIndia.
ThisreportoffersaframeworktoguidetechnologyandbusinessleadersinnavigatingthesechoicesanddesigningAIarchitecturesnotonlyfortoday’smodels,butfortherapidlychangingecosystemahead.
ImplicationsofAIModelChoicesfortheEnterprises4
INSIGHTSBYTE
TheproliferationofAImodelshascreatedanewchallengeforenterprises:identifyingwhichmodeltypeisfitforpurpose,andunderstandingwhatittakestodeployandoperateeffectively.
Thereisnosingle‘best’AImodel.Eachchoiceinvolvestrade-offsbetweenperformance,control,customisation,security,deploymentcomplexityandcost.Formostenterprises,thepreferredchoicewilllikelybeamulti-modelportfolioapproach:frontiermodelsforgeneral-purposeandhigh-endreasoningworkloads;open-weightmodelswherecontrol,customisationoreconomicsjustify;andsmallerspecialisedmodelsforhigh-volumeoredgeworkloads.Increasingly,thisportfolioshouldsitbehindamodel-independentgateway/routerthatcanselectorswitchmodelsasneeded.
Modeleconomicsextendsbeyondheadlinepricing.Thetotalcostofdeploymentandoperatingdependsonmodeltype,workloadcharacteristicsandanenterprise’stechnologyandoperatingcapabilities.Itshouldbeassessedas:model/licence+inference+compute+data+integration+securityandgovernance+operations+talent.Theabilitytooptimisethisstack,notsimplyminimisemodelprice,willdeterminethereturnoninvestment(ROI)ofAI.
Fromanationalperspective,India’sopportunityliesincreatinganIndiaAIStack:areusableAIlayerthatcombinesindigenousmodels,IndiaStack,data,computeandenterprisecapabilities.Suchanecosystemcanscaledomesticallyandevolveintoanexportableadvantageforthecountry.
THECHALLENGE
Forenterprisestoday,AIadoptionhasmovedbeyondthequestionofwhethertouseit,tothechallengeofwhichmodelapproachbestfitsthetaskathand.Performance,capability,infrastructuredemands,cost,governanceandriskalldependonthischoice.
Thedecisionisnolongerasimpleopen-versus-closeddebate.Organizationsmustnownavigateaspectrum:powerfulclosedfrontiermodels,flexibleopen-weightmodels,compactspecialisedmodels,andhybridportfoliosthatcombinethem.Eachoptionbringsdistinctoperationalrequirementsandeconomictrade-offs.
Thisreportprovidesapracticalguidetohelpenterprisesalignmodelswithworkloads,designeffectivedeploymentstrategiesandmanageAIoperationswithconfidence.ItaimstoequipleaderstomovebeyondexperimentationandbuildAIarchitecturesthatareresilient,efficientandalignedwithbusinesspriorities.
ImplicationsofAIModelChoicesfortheEnterprises5
1.AIMODELLANDSCAPE
WORKINGDEFINITIONS
Closedmodel
Modelweightsandcoredevelopmentartefactsarenotmadeavailabletousers–accessistypicallyprovidedthroughanAPIormanagedservice.
Open-weightmodel
Modelweightsaremadeavailablefordownloadanddeployment–accesstosourcecode,trainingdata,trainingmethodologyandotherartefactsvariesacrossimplementations.
Open-sourcemodel
Abroaderconceptthatinvolvestheavailabilityofsourcecodeandlicensingtermspermittingspecifiedformsofuse,modificationandredistribution–thereisnouniversallyaccepteddefinitionofwhatconstitutesafullyopenmodel.
Proprietarymodel
Ownedandcontrolledbyacompanyunderits
intellectualpropertyandlicensingterms–suchmodelscanbeofferedthroughdifferentaccessmodels,
includingAPIsand,insomecases,downloadableweights.
TheterminologyusedtodescribeAImodelsis
ofteninconsistent.Termssuchas‘open’,
‘open-source’,‘open-weight’,‘closed’and
‘proprietary’arefrequentlyused
interchangeably,althoughtheyreferto
distinctcharacteristics.
Inenterprisecontexts,thesedescriptorsare
bestunderstoodasindependentdimensions
ratherthanmutuallyexclusivecategories.
Relevantdimensionsincludetheavailability
ofweightsandartefacts,thescopeoflicence
rights,themodeofdeployment(e.g.,
applicationprogramminginterface(API),
managedinference,private-hostingorself-
hosting),theproviderorownershipmodel,
andthesizeorspecialisationofthemodel.
Proprietarydescribesownershipandlicensing
arrangements,whilecloseddescribes
restrictionsonaccess.Thetermopendoesnot
representabinaryclassification;asingle
providermayofferbothclosedandopen-weightmodels.Fromanenterpriseperspective,themainconsiderationistheextenttowhichamodelcanbeaccessed,controlled,modifiedanddeployedindependently.
Practicaltaxonomyofmodelapproaches
Model
approach
Model
weights
access
Sourcecodeortrainingdataaccess
Self-host
Illustrativeexamples
Typicalmodeofenterprise
access
Closed
No
No
Generallyno
Claude(Anthropic),GPT
API/frontiermodels
(OpenAI),Gemini(Google)
API/managedservice
Yes
Varies
Yes,
subjecttolicence
Llama(Meta),Mistral
(MistralAI),Qwen(Alibaba),DeepSeek(DeekSeek),gpt-oss-120b/gpt-oss-20b
(OpenAI),selectedGLM(
ZhipuAI/Z.ai
),Kimi
(MoonshotAI),MiniMaxmodels,Sarvammodels,Param(BharatGen)
SelectNemotronmodels(NVIDIA)offeradditionalartefactavailability
Self-host,
managedcloudorAPI
Small/
specialisedmodels
Varies
Varies
Oftenyes
Domain-/task-specificmodels
API,cloudor
localdeployment
Source:NasscomResearch
Note:Opennessvariesacrossmodelcomponents.Theexamplesareillustrativeandshouldbetreatedasadatedsnapshot.Availabilityofweightsandlicencingtermsmustbeverifiedforeachmodelatthetimeofenterpriseselection
ImplicationsofAIModelChoicesfortheEnterprises6
2.COMPARISONOFMODELAPPROACHES
Thekeydriversofenterprisedecision-makinginvolvetrade-offsamongperformance,control,flexibility,deploymentcomplexityandeconomics.
ImplicationsofAIModelChoicesfortheEnterprises7
Detailedcomparisonofmodeltypes
Dimension
Closed
Open-weight
Modelaccess
API/managedservice
Weights+API/cloudoptions
Deploymentcontrol
Low
Relativelyhigh;deploymentdependent
Self-hosting
Generallyunavailable
Possible,subjecttolicenceterms
Customisation
Prompting/RAG/provider-supportedfine-tuning
Fine-tuning+deploymentcontrol
Datacontrol
Dependsonprovider/deployment
Potentiallyhigh
Infrastructureburden
Low
Medium-high,dependingondeployment
Vendordependencyandlock-in
Highatmodellayer;canbe
reducedthroughprovider-neutralgatewayiandotherportability
mechanisms
Relativelyloweratmodellevel;
dependencycanremainon
managedservices,servingstackii,cloudandacceleratoriiichoices
Timetodeploy
Fast
Mediumforself-hosted;fast-mediumformanaged
EnterpriseAIcapabilityrequired
Lower
Relativelyhigher
Costmodel
Primarilyusage/tokens
Variesbydeployment
-Self-hosted:compute+
engineeringiv+operationsv
-Managed:managed-servicepricing
Bestsuitedfor
Speed,experimentation,general-purposeworkloads
Control,customisation,scale
Source:NasscomResearch
Note:iProvider_neutralgatewaysofferacommoninterfaceacrossmodelsandproviders,enablingenterprisestoswitch
betweenthemwithoutmateriallyalteringapplications;iiServingstackreferstothesoftwareandinfrastructureusedtorunandservemodels;iiiacceleratorsreferprimarilytoGPUsandotherspecialisedAIcomputehardware;ivEngineering:
integration,customisation,servinganddataconnectivity;vOperations:monitoring,security,updates,scalingandongoingoptimisation
3.CAPABILITIESOFDIFFERENTMODELTYPES
Modelsshouldbeassessedagainstthecapabilitiesmostrelevanttoenterpriseworkloads.Nosinglemodelconsistentlyleadsacrossalldimensions;performancevariesbyworkload,size,deploymentenvironmentandcost.Enterprisesshouldthereforeassessmodelsbasedonworkloadratherthanoverallrankings.Keyevaluationcriteriaincludetasksuccessandquality,latency,throughput,costpersuccessfultask,tool-usereliability,safety,contexthandlingandoperationalavailability.Publicbenchmarkscanserveasscreeningsignalsbuttheyshouldnotbetheprimarybasisforenterprisedecision.
ImplicationsofAIModelChoicesfortheEnterprises8
Consequently,enterprisesshouldadoptaportfolioapproach–not‘oneenterprise,onemodel’,butamixofmodelsanddeploymentmodestailoredtodifferentworkloads,eachwithdistinctdeploymenteconomics.Forexample,alargeenterprisemaydeployafrontierclosedmodelforcomplexreasoning,anopen-weightmodelinaprivateenvironmentforsensitiveworkloads,andsmallerspecialisedmodelsforhigh-volumeoredgeapplications.
Illustrativeuse-casepositioning
Enterpriseworkload
Closed
frontier
models*
Open-
weight
models*
Smaller/specialisedmodels*
Rationale
Generalknowledgework
●●●
●●
(●●●in
select
cases)
●
Traditionally,frontiermodelsofferedstrongergeneral-purposereasoning,languageandmultimodal
capabilities,supportedbylarge-scaletraining,makingthemeffective
acrossvaried,unstructured
enterprisetasks.Recent
developmentsshowthatfrontier-classcapabilityisincreasingly
availableinleadingopen-weightmodels.
Suitabilityshouldthereforebe
validatedagainstenterprise-specificevaluationsforreasoning,language,multimodality,latencyandcost
ratherthanassumedsolelyfrommodelopenness.
Complexreasoning
●●●
●●●
●
Frontierandleadingopen-weight
modelsoffergreaterreasoningdepthandcontext-handlingcapability,
whichenablesmulti-stepanalysisandcomplexproblem-solving;
smallermodelstypicallytrade-offreasoningdepthforefficiency.
Coding
●●●
●●●
●●
Frontierandleadingopen-weightmodelsaretrainedextensivelyoncodeandcanhandlecomplex
softwaretasks;smallermodelscanbeeffectiveforrepetitive,well-
definedcoding,testingandcode-assistancetasksatlowerinferencecost.
Sensitive
enterprisedata
●●
●●●
●●●
Open-weightandsmallermodelscantypicallybedeployedincontrolled
environments,providinggreater
flexibilityoverdataresidencyandaccess,andpotentiallyenabling
privateinference.Closedmanagedmodelscanalsooperatewithin
approvedtrustboundaries.
ImplicationsofAIModelChoicesfortheEnterprises9
Enterprise
workload
Closed
frontier
models*
Open-
weight
models*
Smaller/specialisedmodels*
Rationale
Domain-specificworkflows
●●●
●●●
●●●
Allthreemodeltypescanbe
effectivewhenadaptedtowell-
definedworkflows.Open-weightandsmallermodelsoffergreater
customisationandoptimisation,
whileclosedmodelsprovidestrongout-of-the-boxcapability.
Overall,productionandoutcome
successdependsonaligningthe
chosenmodelwithdataquality,
domainexpertise,workflow
integrationandgovernancecontrols.
Scientific/technicalR&D
●●●
●●●
●●
Frontierandleadingopen-weight
modelsenablestrongmathematical,scientificandtechnicalreasoning
andtheabilitytoprocesscomplex
technicalcontext.Smallermodelsarebettersuitedtonarrower,well-
definedtasks;somecanoutperformlargermodelsonspecificscientificortechnicalbenchmarks.
High-volume,low-costtasks
●●
●●●
●●●
Open-weightandsmallermodels
oftendeliverbettereconomics,astheirlowerinferencecostsmake
themmorewell-suitedtorepetitive,predictableandlessreasoning-
intensiveworkloads.
Edge/offline
applications
—
●●
●●●
Smallermodelshavelowermemoryandcomputerequirements,which
makesiteasiertorunthemlocallyondevicesoredgeinfrastructure,
reducinglatencyanddependenceonnetworkconnectivity.
Source:NasscomResearch
*●●●:strongfit;●●:goodfitwithtrade-offs;●:limitedfit;—:generallyunsuitable
4.ENTERPRISEREQUIREMENTSFORDEPLOYMENTANDOPERATION
Choosingamodelisonlythefirststep.Enterprisesalsohavetobuildthesurroundingtechnologyandoperatingenvironmenttoconvertmodelcapabilityintoproductionapplications
1
.
Themaindifferencebetweenmodelapproachesliesinwhereresponsibilityresides.Closedmodelsusuallyreduceinfrastructureandoperationalburden,whileopen-weightmodelsprovidegreatercontrolbutshiftmoreengineering,andoperationalresponsibilitytotheenterprise.Thisisnotonlyaclosed-versus-open-weightissue:deploymentmodemattersasmuchasmodeltype.Managed
1Aproduction-gradeAIenvironmentalsorequirescapabilitiesbeyondthemodelitself,includingdataandcontextintegration,modelservingandrouting,securityandgovernance,toolandagentintegration,evaluationandmonitoring,andongoingperformanceandcostoptimisation.Theseaspectsarenotcoveredinthisnote.
ImplicationsofAIModelChoicesfortheEnterprises10
inferenceretainsmuchoftheprovider-operatedinfrastructure,whileself-hostingtransferssubstantiallymoreresponsibilitytotheenterprise.
EnterpriseAIdeploymentstack
Layer
Whatanenterpriseneeds
Closed
Open-weight
Modelserving
API/licence,modelserving,fine-tuning/customisation
API/managedservice,provider-dependent
forcustomisation
Greatercontrol,enterpriseormanagedmodelserving
Data
integration
Enterprisedataaccess,pipelines,RAG,data
governance
Enterprise
responsibility
Enterpriseresponsibility
Compute
CloudGPU,dedicated/ownedGPU,on-premise
infrastructure,inferenceoptimisation
GPUinfrastructurenotdirectlyrequiredfor
APIaccess
GPUinfrastructurerequiredifself-hosted
Enterprise
Integration
APIs,enterpriseapplications,identityandaccess
management,workflowintegration,
agent/orchestration
Enterprise
responsibility
Enterpriseresponsibility
Securityandgovernance
Dataprotection,modelsecurity,evaluation,
guardrails,compliance,provenance,patchability,misusecontrols
Sharedresponsibilitywithprovider;dependsondeploymentmode,trustboundaryand
contractualcontrols
Greaterenterprise
responsibility;control
benefitsmustbebalancedwithgreaterresponsibilityforprovenance,patching,accesscontrolsandmisuseprevention
Operations
LLMOps/MLOps,monitoringandobservability,model
updates,performanceandcostoptimisation
Loweroperationalburden
Higheroperationalburden
Model
optimisation
Inferenceoptimisation,modelselection,
performance/costtuning
Relativelylimited
Greaterflexibilityandresponsibility
Infrastructure
management
Provisioning,scaling,
availability,maintenance
Low
High,ifself-hosted
Model
gatewayandrouting
Providerabstraction,routingpolicy,fallback/failover,
versionpinning,modeleligibilitybydata
classification
Enterprise
responsibility,providerplatformsmayoffer
routingcapabilities
Enterpriseresponsibility,canrouteacrossmanagedandself-hostedmodels
ImplicationsofAIModelChoicesfortheEnterprises11
Layer
Whatanenterpriseneeds
Closed
Open-weight
Context,
evaluation
andpolicy
Prompt/context
management,workloadevaluations,safety/policyengine,regressiongates,auditevidence
Sharedresponsibilitybetweenproviderandenterprise
Greaterenterprise
responsibility,particularlyformodelevaluation,
policycontrolsandauditability
Agentandtoolruntime
Toolpermissions,agentidentity/secrets,
orchestration,circuitbreaking,trace-levelobservability
Enterprise
responsibility
Enterpriseresponsibility
Source:NasscomResearch
Graphicsprocessingunit(GPU)accessdoesnotnecessarilymeanGPUownership.Enterprisesusingopen-weightmodelsgenerallyhavefouroptions,makingcomputestrategyanimportantpartofmodelselection.
GPUoptionsforenterprises
Approach
Whatitmeans
Trade-off
OwnGPUs
Dedicatedon-premises/privateinfrastructure
Maximumcontrol,higherupfrontinvestmentandutilisationrisk
RentcloudGPUs
Need-basedGPUcapacityconsumption
Greaterflexibility,variableoperatingcost
Managedinference
Provideroperatedcomputeandservinglayer
Lowerinfrastructureburden,lesscontrol
Hybrid
Combinedowned/privateandrented/managedcompute
Balancebetweencontrolandflexibility,greaterarchitecturalcomplexity
Source:NasscomResearch
5.COSTCOMPONENTS
Amodel’slistedpriceisonlyoneelementofenterpriseAIeconomics.Thetotalcostofdeployingandoperatingamodeldependsonanenterprise’smodelapproach,workloadcharacteristics,
andtechnologyandoperatingcapabilities.Themajorcostheadsareasfollows.
ImplicationsofAIModelChoicesfortheEnterprises12
EnterpriseAIcoststack
Costhead
Closedmodel
Open-weightmodel
Modelaccess/licence
Usage/subscriptionfee
Typicallynomodelaccessfee,butlicencetermsvary
Inference
Token/usagecharges
Majorcost
Self-hosted:computerequiredforinference
Managed:token/capacitypricing
GPU/compute
Notdirectlyrequired,embeddedinproviderpricing
Majorcost
Self-hosted:directcost
Managed:embeddedinmanagedpricing
Storage
Low
Self-hosted:higher(modelweights,dataandinfrastructuremayrequireadditionalstorage)
Managed:couldbesimilartoclosedmodels
Dataengineering
Similar,enterpriseresponsibility
Similar,enterpriseresponsibility
Integration
Similar,enterpriseresponsibility
Similar,enterpriseresponsibility
Fine-
tuning/customisation
Provider-dependent,mayincuradditionalusageortraining
costs
Greaterflexibility,associatedcomputeandengineeringcosts
Securityand
governance
Medium,sharedwithprovider
Self-hosted:higher
Managed:couldbesimilartoclosedmodels
LLMOps/MLOps
Loweroperationalburden
Higheroperationalburden,dependson
deploymentmode(self-hostedormanaged)
AItalent
Relatively,lowtechnical
capability:lowerinfrastructureandmodeloperations
requirement
Relativelyhigherinfrastructureandengineeringcapability,dependsondeploymentmode
(higherforself-hostedorcustomisationvis-à-visormanageddeployment)
Ongoing
optimisation
Medium
Higher,dependsondeploymentmode(self-hostedormanaged)
Source:NasscomResearch
ImplicationsofAIModelChoicesfortheEnterprises13
Sixprimaryvariablesdeterminingeconomics
Therelativeimportanceofcostheadsdependsonworkload,deploymentmodelandoperatingenvironment:
Scaleofusage:Workloadvolume,frequencyand
predictabilitycan
significantlyaffecttheeconomicsofdifferentdeploymentmodels.
1
Performancerequirements:
Real-time,high-
availability/mission-criticalapplicationsmayrequire
additionalcapacityandredundancy,whichcanincreasecosts.
3
Modelandtaskcomplexity:
Largerandmorecapablemodelsgenerallyrequire
greaterinferenceresourcesandaremoreexpensive.
Longerinputs,complexreasoningandmulti-stepagentictaskscanalso
increaseprocessing
2
Qualityandefficiency:Thecostofretries,errors,humaninterventionandrepeated
processingcansignificantlyincreasetheeffectivecost,
whilecaching,model
selectionandroutingcan
lowerexpenses.Therelevantmeasureisthereforenotcost
4
Enterprisecapabilities:Thecostofengineering,
integration,securityand
modeloperationscanriseasenterprisesassumegreaterresponsibilityforthe
technologystack.
6
Controlanddeployment
requirements:Data
sensitivity,security,
residencyandcontrol
requirementscanincreaseinfrastructureandoperatingcosts.
5
Themodelwiththelowestlistedpriceisnotnecessarilythelowest-costenterprisesolution.Aclosedmodelwithahigherper-tokenpricecanbemoreeconomicalthananominally‘free’open-weightmodelifthelatterrequiresdedicatedGPUs,engineeringteamsandcontinuousoperations.
Deploymentmodealsoaffectseconomics.Athighandpredictablevolumes,self-hostingcanbecomeattractivebecauseinfrastructurecostsareamortisedandinferenceoptimised.Bycontrast,managedinferenceorprovisionedservicesmayremainmoreeconomicalwhereutilisationisunevenorthecostofoperatinginfrastructureissignificant.
Decisionsonmodelselectionanddeploymentmodeshouldbeguidedbytotalcostofownershipandworkloadprofile,ratherthanbymodelpricealone.
Totalcostofownership(TCO)shouldthereforebeassessedas:
Model/licence+inference+compute+data+integration+security&governance+operations+talent
Modeleconomicsbyapproach
a.Closedmodels:Usage-basedeconomics
Forclosedmodels,themosttransparentcostisgenerallyAPIinferencepricing,typicallyexpressedpermillioninputandoutputtokens.Pricingmechanicschangerapidlyandvarysignificantlybymodelandprovider.Enterprisesshouldthereforerelyonadatedproviderpricingsnapshotandaccountforinput/outputmix,usagepatterns,caching,discountsandnegotiatedcommercialterms,ratherthanafixedgenericpricerange.
ImplicationsofAIModelChoicesfortheEnterprises14
Therelevantenterprisemetricisnotheadlinecostpertoken,butcostpersuccessful,policycompliantcompletedtaskorworkflow.Effectivecostdependsontokenvolumes,outputlength,cachingorbatch-processingoptions,reasoningeffort,toolcalls,retriesandrework,humanescalationandsupportingservicessuchasembeddings,retrievalandtoolcalls.Forexample,inagenticsystems,alowtokenpricecanbeoutweighedbylongeragenttrajectories,repeatedtoolcallsorpoorfirst-passsuccess.
IllustrativeAPIcostframework
Costdriver
Illustrativeapproach
APIusage/inference
Usage-basedpricing,typicallychargedpermillioninputandoutputtokens,withoutputtokenspriceshigherthaninputtokens
Caching/batchprocessing
Canreduceeffectivecostwheresupported
Additionalservices
Embeddings,retrieval,toolcalls,storage,etc.
Enterpriselayer
Integration,security,governanceandmonitoring
Source:NasscomResearch
Themodelbillmayberelativelylowcomparedwithsurroundingenterprisecosts(suchasdata,integration,securityandgovernance),particularlyinlow-volumeusecases.Atscaledproductionvolumesoragenticworkloads,however,inferencecanbecomeamajoroperatingcost.Modeleconomicsshouldthereforebeassessedattheworkloadlevel:costpersuccessfulquery,document,transaction,agenttaskorbusinessprocess(includingretry,escalationandcontrolcosts),ratherthansimplycostpertoken.
b.Open-weightmodels:Deploymentmodedeterminescost
Open-weightdoesnotimplyasinglecoststructure.Self-hostingshiftstheeconomicstowardscompute,modelservingandongoingoperations,whilemanagedorserverlessopen-weightinferencecanremainusage-orcapacity-priced.Enterprisesshouldthereforeassesseconomicsbasedondeploymentmoderatherthanmodelopennessalone.
EnterprisescaneitherownGPUinfrastructureorrentcomputefromcloudproviders,GPU-as-a-Serviceplatformsorotherinfrastructurevendors.Theappropriatemodeldependsonworkloadvolume,utilisation,latency,data-residencyrequirementsandtherequiredlevelofcontrol.
However,GPUhoursareonlyonepartofthecost.EnterpriseAITCOalsoincludescostssuchas:
Hostinfrastructure,memoryandstorage
Networkinganddatatransfer
Modelservingandinferenceoptimisation
Securityandsoftware
EngineeringandLLMOps/MLOps
Redundancyandavailability
Infrastructurerequirementsvarybymodelsize,quantisation,inferencearchitecture,concurrencyandlatency.Asaresult,theeconomicsofAIareshiftingfromthenarrowquestionof‘whatdoesthemodelcost?’tothebroaderquestionof‘whatdoesitcosttoreliablyrunthisworkloadattherequiredscale,performanceandlevelofcontrol?’
ImplicationsofAIModelChoicesfortheEnterprises15
6.MATCHINGMODELSTOENTERPRISECONTEXTS
a.Practicaldecisionframework
Enterpriseneed
Likelymodelapproach
Rationale
Rapid
experimentation/pilots
Closed
Fastdeployment,minimalinfrastructure
Generalenterpriseproductivity
Closed/open-weight
Strongcapability
Highlysensitive/regulateddata
Open-weightself-
hosted/privatedeployment,approvedmanagedmodel
Modelopennessaloneisnotdeterminative,controloverdataresidency,retention,
isolation,auditability,security
High-volume,predicta
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