Many of the larger enterprises (retail, manufacture, insurance, etc) are consistently becoming cloud-only or have reduced their data center foot print massively over the last 10 years.
Do you think these enterprises will begin hosting their own models? I'm not convinced they'll join the capex race to build AI data centers. It would make more sense they just end up consuming existing services.
Then there are the smaller startups that just never had their own data center. Are those going to start self-hosting AI models? And all of the related requirements to allow say a few hundred employees to access a local service at once? network, HA, upgrades, etc. Say you have multiple offices in different countries also, and so on.
> manufacture
They're much less strict than they were on cloud, but the security practices are really quite strict. I work in this sector and yes, they'll allow cloud, but strong data isolation + segregation, access controls, networking reqs, etc. etc. etc. are very much a thing in the industry still, particularly where the production process is commercially sensitive in itself.
> Do you think these enterprises will begin hosting their own models? I'm not convinced they'll join the capex race to build AI data centers. It would make more sense they just end up consuming existing services.
they already are
Enterprises (depending on the sector, think semi manufacturing) will have no choice for two reasons:
1. Protecting their intellectual property, and
2. Unknown “safety” constraints baked in. Imagine an engineer unable to ran some security tests because LLM thinks it’s “unsafe”. Meanwhile, VP of Sales is on the line with the customer.