That's the usual response, along with "you can't compete with free". But, look at how much money the frontier models are printing, it is obvious that the bell curve of usefulness is still centered around them.
Let's also not forget that even the open models are not getting smaller, they are getting larger. Of course, you can distill them down into something that will fit on smaller compute, but at the end of the day, the data centers of compute, still play a huge role.
Open models keep getting bigger, but smaller open models also keep getting smarter. What I can do with an 8b used to require a 32b.
Also the decision makers who are signing off on things like ChatGPT Enterprise are at least 18 months behind the curve of what you can actually do with these things and how cheap they can be. They're still trying to figure out how to actually adopt the tech out of a sense of fomo, nevermind making nuanced decisions about hosting an open weights model. I see this firsthand in my own job.
I'm talking about adding facts to a model by modifying engrams or trying to bolster guardrails with J-washing, meanwhile they're still trying to figure out how to best prompt Copilot.
Give it a few years for everyone else to catch up, I'm barely able to catch my breath before there's some new development in the open source/weights space
An easy counterargument is that the frontier models are swallowing all of the attention and money because they currently don't have a constraint of demonstrating that their value exceeds their cost. Take that away and it might turn out that cheaper models that are "good enough" and can be profitable are the more attractive route.