Morgan says enterprise interest is shifting toward open models, driven by coding agents and assistants that handle longer tasks. Cost is the most immediate benefit, while greater control and customization are longer-term goals. He describes token use growing 150 times on Ollama Cloud since the start of the year.
Open Models Change The Economics of AI
Speaker
Jeffrey Morgan, co-founder and CEO of Ollama, joins Y Combinator’s The Light Cone to discuss open models, their economics and enterprise adoption, with the show’s hosts.
Morgan says faster model releases make custom training harder, though improving tools help teams keep up. For a day-zero launch, Ollama coordinates inference support, useful harnesses, cloud capacity, and hardware so models run reliably and quickly. He compares the work to an operating system that connects applications with hardware and drivers.
Morgan expects most business tokens to pass through open models, while frontier models handle the hardest tasks. He estimates open models could account for 80 to 90 percent of tokens but only 10 to 20 percent of spending. He also expects local models to handle simpler work, with cloud models available when a task needs more capability.
Morgan recounts how he and his co-founder moved from developer security projects toward making open models easier to run. They shipped the first Ollama version in two weeks, around the release of Llama 2, after earlier ideas had not found a strong customer problem. He says the team later saw coding agents create demand for cloud access to open models, while stressing the need to stay close to customers.
Takeaways
- Route routine, high-volume tasks to low-cost open models and reserve frontier models for work that needs them.
- Compare models by cost per completed task as well as cost per token.
- Plan model launches around inference support, harness compatibility, capacity, and hardware performance.
- Use local models for simpler workflows when existing business hardware can run them effectively.
- Talk with customers directly to discover which problem is valuable enough to solve.
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What was claimed 12
- previously atJeffrey Morgan previously at
Docker, Inc.
Senior engineer and product manager“My co-founder and I previously built Docker Desktop while at Docker”
YouTube Verified2 sources· Talk, Web· archived
- foundedJeffrey Morgan founded
Ollama
CEO and co-founder“Jeffrey Morgan, co-founder and CEO of Ollama”
YouTube Verified4 sources· Talk, Web· archived
- metric
Ollama: Used by 85% of the Fortune 500
“used by 85% of the Fortune 500”
YouTube Unverified1 source· Talk
- metric
Ollama: 178,000 GitHub stars
“has 178,000 GitHub stars”
YouTube Unverified1 source· Talk
- metric
Ollama: Used by 9 million developers
“Ollama is used by 9 million developers”
YouTube Unverified1 source· Talk
- feature
Ollama: Runs open-source AI models locally and in the cloud
“the easiest way to run open-source AI models locally and in the cloud”
YouTube Unverified1 source· Talk
- ceo ofJeffrey Morgan CEO of
Ollama
CEO“co-founder and CEO of Ollama”
YouTube Unverified1 source· Talk
- launched
Ollama launched
Ollama Cloud
“Earlier this year, we launched Ollama Cloud.”
YouTube Unverified1 source· Talk
- metric
Ollama: Cloud token usage grew 150 times since the start of the year
“Across the cloud, we saw 150 times growth since the start of the year.”
YouTube Unverified1 source· Talk
- builtJeffrey Morgan built
Docker Desktop
“My co-founder and I previously built Docker Desktop”
YouTube Unverified1 source· Talk
- launched
Ollama: Ollama launched in July 2023
“Ollama wasn't launched until July 2023”
YouTube Unverified1 source· Talk
- invested inSeries A
“we partnered with Benchmark in 2022”
YouTube Unverified1 source· Talk







