Research Publication – Artificial Intelligence – Animal Farm – Radio Free Mobile

May 30th 2023: RFM deepens its coverage of generative AI with the publication of Artificial Intelligence – Animal Farm. 

RFM research subscribers will receive their copy by email. 

There is concern that Microsoft and Google have already lost their edge in AI. The free availability of Meta’s LlaMa models has triggered a wave of innovation in the open-source community. Open-source models are available that are close in performance to those being offered by the big players implying that the lower end of generative AI quickly commoditises. This means that the moats that Google and Microsoft have already managed to create will become key differentiators and RFM thinks that they will protect them while they work out how to adapt to open-source competition.

• Genie escaped. Until recently, building LLMs was only possible for those with lots of cloud compute resources and big bank balances. However, the “leak” of Meta’s foundation model to the market has enabled open source to begin tinkering from which there has been a steady flow of results. This is what underpins fears that the leaders in AI have already lost their edge.
• Self-destructive innovation. The irony is that it is innovations from both Microsoft and Google that have enabled the open-source community to break the dependence on the cloud and begin fine-tuning LLMs at the edge. This has resulted in highly capable models being made available for free to anyone who wants them.
• Innovations: LoRa & Chinchilla. LoRa is a technique invented by Microsoft that enables LLMs to be trained on devices with a fraction of the storage or compute power that was previously required. Chinchilla was invented by Google and is a tweak to training methodology that allows smaller models to perform better than others many times their size.
• Galloping commoditisation. The combination of a freely available foundation model and its weights with these new techniques is how open source is managing to train models on Macs, laptops and PCs with powerful graphics cards. This means that the basic end of this market is going to commoditise extremely quickly meaning that other factors such as developer relationships and user numbers will be extremely important in determining winners and losers.
• Moats. RFM finds that both Google and Microsoft have substantial moats that will protect them from competition from the open-source community. These moats have been created from the fact that both already have well over 1bn users and the fact that ChatGPT is becoming a development platform in its own right. Meta is building its own moat in the open-source community.
• Machiavellian Meta. RFM is convinced that Meta’s “leak” of its LlaMa foundation models and their weights was no accident. “Leaking” LlaMa to open source has meant that LlaMa is now the de facto standard for open-source development and a platform in its own right. These innovations will all be available to Meta to use in its products and services meaning that it has effectively outsourced R&D at almost zero cost.