Economic benefits of open foundation models
02.08.2024 - 02:55
This study estimates the core economic benefits of open foundation models for businesses in the US economy. This considers profit uplift, operational efficiencies and cost savings in rent reductions for US businesses having access to open foundation models versus closed foundation models.
Estimating the benefits of open foundation models in AI
To inform the US National Telecommunications and Information Administration consultation on “Dual Use Foundation Artificial Intelligence Models With Widely Available Model Weights”, this study estimates the benefits of a ‘diverse’ generative AI ecosystem, where both open and closed foundation models exist and are available to access, against the counterfactual of a ‘restricted’ ecosystem where only closed foundation models are available.
Open foundation models could support faster adoption of generative AI amongst US businesses and provide an additional $1.5 trillion in benefits for them in 2035
The transparency, competition and innovation supported by open foundation models could accelerate the adoption of generative AI by US businesses in 2035
Open models allow developers to access, deploy, and modify the model… which has played a key role in growing developer activity in generative AI
Open foundation models support transparency, competition and innovation, and are likely to drive higher adoption of generative AI across the US economy.
Open model weights allows researchers and authorities to inspect, test, modify and deploy models independently. US IT professionals recognize the security benefits of open source - 90% of US IT executives believe enterprise open source is as secure or more secure than proprietary software.
As seen with other technologies, open sourcing puts downward pressure on costs and gives businesses greater flexibility and choice. The top reason businesses use open source software is its cost competitiveness.
Publishing model weights enables developers to collaborate on fine tuning and crowdsource better, safer models. The number of third-party variant models publicly released to date is over 70,000.
We modeled likely adoption curves for generative AI across the two scenarios: diverse and restricted.
In a diverse future generative AI ecosystem, there are highly-capable open and closed foundation models (similar to the current state). In this scenario, 88% of US businesses adopt foundation models.
In a restricted future generative AI ecosystem, government regulation or other competitive dynamics results in predominantly closed foundation models. In this scenario, 55% of US businesses adopt Generative AI foundation models.
Read our latest posts
Unlocking Australia's R&D potential
Our research in collaboration with Atlassian, the BCA and Cochlear sets out a path forward for Australia to realise its R&D potential. Australia’s productivity growth is at a 60-year low, driven in part by declining business investment in R&D. Our latest report highlights the critical role large businesses play in Australia’s innovation ecosystem and the urgent need for policy reform. Despite strong talent and institutions, Australia underperforms global peers due to high costs and uncompetitive incentives. The report outlines six targeted reforms - including simplified R&D tax incentives and a commercialisation premium - that could together generate $7.7 billion in annual economic output and lift productivity by 0.1%, with a fiscally neutral impact. With the Strategic Examination of R&D underway, this is a pivotal opportunity to restore Australia’s innovation edge.
28 Jul, 2025
Digital platforms and competition in Australia
Our latest research in collaboration with Apple examines proposals to introduce an ex ante competition framework for digital platforms in Australia by assessing digital platform regulations in international jurisdictions. We find that jurisdictions that have implemented ex ante regimes have experienced implementation challenges, with consequences for users and the economy. This study highlights that the need for regulatory regimes to preserve the benefits delivered by platforms while maintaining the flexibility to adapt to rapidly evolving technologies.
24 Jul, 2025
Climate Risk Index for the European Energy Sector
Mandala Partners in partnership with Zurich Resilience Solutions has produced Europe's first comprehensive Climate Risk Index for renewable energy infrastructure across five major European markets. This groundbreaking analysis reveals the scale of climate vulnerability facing Europe's clean energy transition and provides actionable insights for building resilience across France, Germany, Italy, Spain, and the UK. Nearly half of Europe's renewable generation capacity is in critical climate risk categories, threatening the foundation of the continent's energy security and economic stability.
16 Jul, 2025
Shock Resistant
Shock Resistant outlines novel insights into the ways that platform workers in the US used platform work as a strategy for mitigating the impacts of the pandemic and cost of living crisis.
2 Jul, 2025