Michael Holzer
Director and Principal @ Mikani | Innovation and Investment
September 18, 2024
Generative Artificial Intelligence (AI) tools have revolutionised various industries by automating content creation, enhancing customer interactions, and driving innovation. However, businesses must carefully consider the type of generative AI tools they adopt.
I wish to explore some of the differences between open and closed generative AI tools and highlight the risks businesses may face if they rely solely on open AI tools.
Open Generative AI Tools
Open generative AI tools are typically developed and maintained by a community of developers. These tools are often open-source, meaning their source code is freely available for anyone to use, modify, and distribute. Examples include GPT-3 from OpenAI (with certain access restrictions) and various models available on platforms like Hugging Face.
Advantages:
- Cost-Effective: Open AI tools are often free or low-cost, making them accessible to businesses of all sizes.
- Customisation: Businesses can modify the source code to tailor the AI to their specific needs.
- Community Support: A large community of developers can provide support, share improvements, and collaborate on new features.
Disadvantages:
- Security Risks: Open-source tools can be more vulnerable to security breaches if not properly managed.
- Quality Control: The quality of open AI tools can vary, and businesses may need to invest in additional resources to ensure reliability.
- Compliance Issues: Ensuring that open AI tools comply with industry regulations and standards can be challenging.
Closed Generative AI Tools
Closed generative AI tools are proprietary solutions developed by companies that retain control over their source code. These tools are typically offered as commercial products or services, such as IBM Watson, Google’s AI offerings, and Microsoft’s Azure AI.
Advantages:
- Security: Closed AI tools often come with robust security measures and regular updates to protect against vulnerabilities.
- Reliability: These tools are usually well-tested and maintained, ensuring consistent performance.
- Compliance: Providers of closed AI tools often ensure their products comply with industry regulations and standards.
Disadvantages:
- Cost: Closed AI tools can be expensive, with costs scaling based on usage and features.
- Limited Customisation: Businesses may have limited ability to modify the AI to suit their specific needs.
- Vendor Lock-In: Relying on a single provider can create dependency, making it difficult to switch to other solutions.
Risks of Relying Solely on Open AI Tools
While open AI tools offer numerous benefits, businesses should be aware of the potential risks associated with relying exclusively on them:
Data Security and Privacy:
- Open AI tools may not have the same level of security as closed tools, increasing the risk of data breaches.
- Businesses must ensure that sensitive data is adequately protected and that the AI tools comply with data privacy regulations like GDPR or CCPA.
Intellectual Property (IP) Concerns:
- Using open AI tools can raise IP issues, especially if the tools are modified or integrated with proprietary systems.
- Businesses need to be cautious about licensing agreements and the potential for IP disputes.
Lack of Support and Maintenance:
- Open AI tools rely on community support, which can be inconsistent.
- Businesses may face challenges in obtaining timely updates, bug fixes, and technical support.
Quality and Performance Variability:
- The quality of open AI tools can vary significantly, leading to potential performance issues.
- Businesses may need to invest in additional resources to test and validate the tools before deployment.
Regulatory Compliance:
- Ensuring that open AI tools comply with industry-specific regulations can be complex.
- Businesses must conduct thorough due diligence to avoid legal and compliance risks.
Conclusion
Both open and closed generative AI tools have their unique advantages and disadvantages. While open AI tools offer cost-effectiveness and customisation, they also come with security, quality, and compliance risks. On the other hand, closed AI tools provide robust security and reliability but can be costly and less flexible.
For businesses, the key is to strike a balance between leveraging the benefits of open AI tools and mitigating the associated risks. This may involve adopting a hybrid approach, where open AI tools are used for non-sensitive tasks, while closed AI tools handle critical and sensitive operations. By carefully evaluating their needs and the capabilities of different AI tools, businesses can make informed decisions that drive innovation while safeguarding their interests.