Meta's open-source Llama strategy compresses AI model pricing power and commoditizes the model layer, favoring companies with massive distribution and existing monetization engines

“Open-source models compress pricing power. If high-quality AI becomes widely accessible, then the profit margins of closed AI providers become harder to sustain, expensive APIs face downward pressure. Proprietary modes weaken. The underlying model layer slowly becomes commoditized. That scenario heavily favors companies with massive distribution networks, user ecosystems, and existing monetization engines.”