Why Companies Fine-Tune Open-Source LLMs Instead of Paying Per-Token API Bills

A fine-tuned 7B model can outperform GPT-4 on specific tasks at 1/200th the running cost. Here's the full business case, and how companies build defensible AI moats with open-source fine-tuning.

There's a transition happening quietly inside technology companies. Early AI adopters who built on GPT-4 API calls in 2023 are now asking a harder question: at what scale does it stop making sense to rent intelligence from OpenAI, and start making sense to own it? The answer, for a growing number of companies, is: sooner than expected. This post covers the full business case for fine-tuning open-source models: the economics, the performance reality, the risks, and the practical path from API dependency to owned model capability. Let's start with a concrete scenario. A mid-size B2B software com…

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