Invest Like the Best with Patrick O'Shaughnessy · Tuesday, August 4, 2026
Gavin Baker addresses the market's concern over the rise of open-source AI models, stating that it primarily shifts margin dollars from frontier models to the AI infrastructure layer. He argues that this is not inherently negative for the overall AI ecosystem.
“But broadly speaking, all open source taking share does is take margin dollars out of the frontier model layer.”
“And you're literally just taking margin from frontier models and essentially driving more margin dollars into the AI infrastructure layer.”
“And by the way, I think open source is important to world where there's just one or two D-RAM type layers that charge like 90% margins.”