What it means
Hosted models such as Claude or GPT run only on their provider's servers. Open-weights models, such as Gemma, Llama, Mistral, Qwen and DeepSeek models, publish their weights, so you can run them on your own servers or a cloud of your choice.
Open weights is not always the same as open source. Licenses vary, and some add conditions for large companies or particular uses.
Why it matters for a business
Open weights give full control over data and versions, and can lower cost at very high volume. They also mean you run and maintain the infrastructure yourself, which is a real cost for small teams.
A business example
Things to watch
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Read the license before building on a model.
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Include GPU, engineering and monitoring in cost estimates.
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Compare quality with a hosted model on your tasks.
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Plan how you will update to newer versions.