Why BigTech Spent 💰 Billions on Making ’FREE' Open-sourced Stuff?

❌ Because Bigtech are benevolent overloads? Nope. Bigtech are for-profit and are 'legally' required to not waste shareholder's money. Also, Bigtech is an institution with institutional goals. Even if a CEO is 'benevolent', under a market society, an institution HAS TO profit and grow in order to attract talent. Otherwise, people leave and the company falls apart.

❓ Because Bigtech need these 'vanity projects' to attract talent. True but trivial. The ground truth is still that "Bigtech are for-profit institution". If open-source is just for appearance, it would be impossible to justify the billion dollar price tag. No CEO would put his neck on the line for this since the ROI cannot be reasonably measured.

✅ Because Bigtech need these to SURVIVE competition. If you are Google, would you build your future project map on top of OpenAI, which Microsoft 'controls'? Unlikely. So now you have two choices: to build another close-sourced alternative; or to build an opensourced one. The beauty of open-source is that, if run well, it can enlist the contribution of a much broader community so that you don't have to fight Microsoft/OpenAI alone.

✅ Because Bigtech spending billions helps justify their trillion dollar valuation. The billions Meta invested in MetaAI (Pytorch, Llama etc.) is not only justified but a matter of life-or-death, because Meta is a public company and its valuation premium (p/e ratio) depends on investor's believe that it will continue to be a supreme tech leader. If Meta is just a social network company selling ads, it would be worth only 1/3 of what it is today.

There are other considerations out there. For example, a company developing powerful open-sourced software can sell enterprirse version and provide services deploying or maintaining it. This is actually how Linux/IBM makes money.

Open-source is not some utopia or magic pills. It is a well-thoughtout strategy on the forefront of tech, business and finance. Companies like Databricks, Hugging Face etc. are very interesting cases to study.