Why Companies Invest in Open-Source Tech and Research

Understanding the Business of Open Source Software and AI

Hey there, I’m Devansh. I write for an audience of ~200K readers weekly. My goal is to help readers understand the most important ideas in AI and Tech from all important angles- social, economic, and technical. You can find my primary publication AI Made Simple over here, message me on LinkedIn, or reach out to me through any of my social media over here. I work as a consultant for clients looking to

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Recently, I had dinner with Eric Flaningam, an investor, (excellent) writer, and one of our cult members in NYC. We talked about a bunch of interesting topics, including open-source software (OSS) in AI and why companies invest so much in it. After all, how does a company gain from spending so much time and effort into R&D for a tool only to give it to the public for free, especially since it exposes possible trade secrets/competitive advantages to their competitors?

This article will look to answer that question from a purely business perspective. To do so, we will look at various kinds of stakeholders in the Tech Ecosystem (focusing on AI) and how each can leverage OSS for their benefit. Once that is covered, we will review the different strategies companies can use Open Source to increase business adoption.

“Open Source Is Eating Software FASTER than Software Is Eating The World”.

For conciseness- I’ll keep the highlights section more focused on the principles and go into more details and examples in the main article.

Executive Highlights (TL;DR of the article)

To fully understand the ideas discussed, it helps first to clear a key misunderstanding that often comes up in this discussion.

The False Dichotomy Between Open Source and Closed Source Software in AI

Conversations around Open Source (we will use OS for this for simplicity) often frame OSS and Closed Software in direct opposition to each other. Open source is often misconstrued as simply “free software” with no monetization potential. However, this narrow view ignores the vast ecosystem and diverse business models that exist in tech (every closed project would break without OS components, and OS projects rely extensively on Closed Companies funneling money into the projects).

Empowering the AI Generation: Microsoft’s Open-Source Initiative

Open Source is great for solving large problems that affect lots of people. Closed Software applies the general solution created by OS projects and refines their implementation to specific use cases required by specific people. Without OSS, Closed Software would have to build to build everything from scratch. Without Closed Software, Open Source solutions would often remain inaccessible or unusable to the average person, and their potential impact would be significantly diminished.

Aya Slika will be helping me by adding more visuals to the newsletter to improve its quality. Any suggestions on how we can take things to the next level would be appreciated.

Thus, Open and Closed Software are often complementary forces that are blended together to create a useful end product.

To craft a good OS strategy for a company, it helps to understand how it impacts different entities, which is what we will discuss next.

How Open Source Helps Different Stakeholders in AI