The gap between proprietary frontier models and open-weight alternatives has collapsed. Open models now reach frontier performance within six months of closed releases—a timeline that seemed impossible just two years ago.
The inflection point came in early 2025 when DeepSeek R1 dropped—a Chinese lab releasing an open reasoning model matching OpenAI’s o1 capabilities at a fraction of the training cost. Jensen Huang called it “the first open reasoning model that caught the world by surprise and activated this entire movement.”
If reasoning—the capability that defined the frontier—can be open-sourced, what remains proprietary?
The Numbers Tell the Story
By mid-2025, the data was undeniable:
80% of AI startups were building on open models
1-in-4 OpenRouter tokens came from open models
160M+ monthly downloads on HuggingFace, growing exponentially
NVIDIA released ~100 models throughout 2025—more than any other organization
Today, in 2026, open models are the default starting point. The convergence is now baseline reality.
Strategic Implications
Companies still competing on model benchmarks are fighting yesterday’s war. The moat has shifted to three areas:
Proprietary training data — What unique data can you access?
Product integration — How deeply embedded is AI in your workflow?
For startups, the “wrapper” critique intensified—but so did the opportunity for vertical specialization on top of open foundations. The question is no longer “which model is best” but “what unique value can you build on top of commoditized intelligence?”
The Bottom Line
Model capability has commoditized faster than anyone predicted. The moat collapsed—not gradually, but rapidly. The frontier gap shrunk from years to months, fundamentally reshaping the competitive landscape of AI.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
