Home 2024 The New AI Dilemma: Trade-offs Between Commercial and Open-Source GenAI

The New AI Dilemma: Trade-offs Between Commercial and Open-Source GenAI

by Kelly

Dr. John Pritchard, chief product officer at Radiant Logic, delves into the strategic dilemma businesses face in adopting GenAI, weighing the benefits and drawbacks of commercial solutions versus open-source models.

The last year has been dominated by Generative AI (GenAI) hype. Business and technology leaders have been busy discussing the potentially revolutionizing benefits of GenAI and its rather concerning drawbacks and security risks. Regardless of which side of the conversation anyone weighed in on, few can dispute that GenAI is here to stay and will be a pivotal part of the stage of business transformation. 

Now that we’re gradually exiting this initial period of excitement, businesses have focused more on the practical matters of adopting GenAI. According to a recent STATE OF MARTECH 2024 studyOpens a new window  report by Netcore,  7 out of 10 CEOs  plan to invest in GenAI this year. However, the first step to adoption begins with choosing the right solution. 

Businesses currently have two types of GenAI tools: commercial AI services and open-source Large Language Models (LLMs). Commercial AI solutions, such as the prominent LLM ChatGPT and Microsoft’s Azure OpenAI Service, offer a streamlined, integration-ready approach. These solutions are particularly attractive for their ease of deployment and immediate impact. However, they also introduce concerns such as dependency on a single vendor and potential data privacy and intellectual property rights issues.

In contrast, open-source LLMs provide a different value proposition. They allow for extensive customization, enabling businesses to tailor the technology to their requirements. This approach can lead to more refined and relevant outcomes but at the cost of increased operational expenses and the necessity for specialized technical skills.

The strategic dilemma for business leaders lies in balancing the urgency of market deployment with the critical need for data security and customization. So, how can business leaders choose the most optimal solution for their workforce? 

Comparing Commercial and Open-source GenAI

Commercial GenAI services are similar to turnkey business solutions. Their primary appeal is the ease of use — organizations can quickly integrate these systems without significant investment in time or resources. Many of these services, such as ChatGPT itself, have high-standard security controls and adhere to data regulations. 

However, the main concern surrounding these systems is data governance. The possibility that proprietary or sensitive information might be used in training datasets or inadvertently shared with others is a notable risk.

Moreover, these systems may not fully align with specific enterprise policies, and there’s a chance of generating either overly conservative or inaccurate responses. For instance, a study by Willowtreeapps on ChatGPT highlighted its proficiency in delivering correct responses in 16 out of 21 instances. Still, it also tended to be more conservative compared to human input.

In contrast, open-source LLMs such as Meta’s LLaMA 2, Mistral, BLOOM, and GPT-J present a more customizable alternative. These platforms allow businesses to tailor AI models to their specific needs, enhancing the accuracy and relevance of the outputs. They provide significant scope for implementing robust security measures and data protection protocols tailored to an organization’s requirements. Open-source LLMs enable businesses to develop bespoke AI applications, from content creation to data analytics.

However, the adoption of open-source solutions requires considerable operational investment. This includes the infrastructure needed to run these models and the specialized expertise of an engineering and operations team required to customize and manage them effectively. Fine-tuning these models is intricate and resource-intensive, with a risk of producing biased or inaccurate results if not managed correctly.

Businesses must weigh several factors when deciding between commercial and open-source GenAI options. These include data privacy, cost implications, and the desired level of control over AI systems. Understanding these trade-offs is vital for companies aiming to align their AI strategy with broader objectives like enhancing productivity, introducing new services, or mitigating risks. The choice is not just about technology; it’s about strategically aligning AI capabilities with business goals and risk profiles.

Essential GenAI Security Factors

Security considerations are critical to integrating GenAI into any business operations. For commercial AI services, the primary security concern centers on handling sensitive and proprietary data. While these platforms often have robust security controls such as encryption or multi-factor authentication (MFA), they do not automatically guarantee data confidentiality within conversations. 

As these platforms use existing conversations to train the algorithm constantly, the data is often stored on external servers, which can be susceptible to sophisticated attacks. Also, if employees use confidential data within these platforms, there’s an inherent risk of such information getting leaked if individual accounts are exploited. Enterprises must implement their controls and policies to safeguard intellectual property and sensitive information from exposure through commercial LLMs.

On the other hand, open-source AI models introduce a different set of security challenges. Without the built-in comprehensive security measures typical of commercial platforms, businesses must proactively develop their security protocols. This includes establishing defenses against prompt injection attacks and implementing stringent access controls and authentication mechanisms.

GenAI Regulatory Expectations Explained

The legal and regulatory landscape also holds weight in decision-making. For businesses considering commercial AI services, evaluating how these platforms comply with international data laws and regulations is essential. For example, Microsoft’s adherence to EU data residency lawsOpens a new window  is a crucial consideration for businesses engaging with European clients, as these laws mandate that data on EU citizens be stored within the EU. 

Moreover, navigating the contractual complexities related to liability in cases of data breaches or misuse of AI-generated content is a critical aspect of using commercial AI services. These platforms often face challenges in ensuring privacy and preventing data leakage, particularly when handling confidential business information. Notably, legal disputes have arisen over the data used to train LLM models, such as the lawsuit against OpenAI by authors like Jonathan Franzen, John Grisham, and Elin Hilderbrand  claiming unauthorized use of their work.

Meanwhile, Open-source AI solutions transfer regulatory compliance responsibility to the businesses utilizing them. This includes ensuring that AI outputs do not violate copyright laws, with the liability for any infringements resting on the users. Companies deploying open-source AI must also stay abreast of evolving global regulations, such as new AI guidelines or restrictions, which can vary widely across jurisdictions.

Given the ever-changing nature of AI regulation, businesses must adopt a proactive approach to understanding and complying with legal requirements relevant to their chosen AI solution. This often involves regular consultations with legal experts, particularly for international businesses, to ensure continuous compliance and mitigate legal risks associated with AI adoption.

See More: Biden’s AI Regulation: Navigating New Safety Standards

A Balanced Approach to GenAI Integration

There’s no universal answer for which type of GenAI is best for all businesses – it depends on the business’s priorities, objectives, and available resources. This decision requires a balance that aligns with operational demands, security requirements, and regulatory compliance.

For enterprises aiming for maximum control over their AI applications, deploying open-source LLMs offers considerable flexibility. This path, however, necessitates a solid internal infrastructure for operational management and security. It demands substantial investment in talent and security frameworks to manage associated risks effectively. So, such solutions would be optimal for businesses with the capacity and resources.

On the other hand, commercial solutions like Microsoft Azure OpenAI Service emerge as a strong contender for businesses prioritizing security and compliance. Despite their inherent strengths, these options should be complemented by additional internal controls. This includes mechanisms for content filtering and addressing potential inaccuracies in AI-generated content, enhancing the overall efficacy of the AI system.

Regardless of the path, businesses must implement third-party or homegrown content filtering systems. These systems should be designed to scrutinize both prompts and outputs in light of enterprise policies and compliance requirements, including copyright adherence. 

Security teams must also adopt a layered approach to security tailored to the specific nuances of the selected AI solution. This involves data classification, protection protocols, and role-based access management, providing a comprehensive shield against potential vulnerabilities.

In conclusion, each organization’s decision regarding AI tool selection and deployment is unique, hinging on its specific needs and capabilities. The key to success lies in adopting a well-considered, strategic approach to AI integration, one that not only leverages the technological potential of GenAI but also aligns with the organization’s broader business objectives and risk profile.

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