AI model costs are pushing startups towards cheaper open weigh

Harvey's gross margin plunged due to rising AI model rental costs but recovered after launching its own model based on Moonshot's Kimi K3. Other startups like Abridge, Decagon, and Ramp are also developing in-house models amid rising expenses from providers like OpenAI and Anthropic. Investors including Sequoia Capital support this shift towards cheaper open-weight AI models.