Corporate America is getting hooked on open-source AI

AT&T turned to artificial intelligence models from Anthropic and OpenAI in recent years to help with customer service, call transcription and coding. The AI models charged fees and were "closed," which meant the AI companies did not share their underlying code. This year, AT&T changed course. As AI costs skyrocketed, Andy Markus, the company's chief data and AI officer, looked for cheaper alternatives. He landed on "open" models, which can be downloaded and modified without payment or approval. By May, open models accounted for 20% of AT&T's AI use. That has since risen to 40% and may jump to 60% in the coming months, Markus said in an interview. "We believe it could go much, much higher," he said, adding that AT&T was saving up to 80% on AI costs compared with earlier this year. Open-source AI has become all the rage in corporate America. Like AT&T, companies such as Airbnb and Deloitte are also turning to open AI models that are easy to customize and cheaper to use. Last month, open models accounted for 58% of AI use, up from 10% a year ago, according to U.S. user data from OpenRouter, a platform that lets people choose different AI models to complete tasks. On Thursday, chipmaker Nvidia announced it was buying Hugging Face, a library of open AI models, for $12.9 billion, another sign of the technology's importance. "Together, we will make AI more open, more capable and more accessible to people and institutions around the world," Nvidia CEO Jensen Huang said. Story continues below this ad Open models come in two flavors. One is an open-source model, which makes its underlying code public. The other is an open-weights model, which makes its "weights" -- the numerical calculations that determine how the model reasons -- public. Many of the most popular open AI models are made by Chinese companies like Moonshot AI, DeepSeek and Alibaba. Rather than spending millions in fees to use a closed model, developers can download one of the Chinese systems and build their…