--- title: "Jensen Huang Says 'Closed Models Are Cheaper': Here's Why" type: "News" locale: "en" url: "https://longbridge.com/en/news/293963298.md" description: "Nvidia CEO Jensen Huang argues that closed AI models are often cheaper than open ones, challenging the common belief that open-source is more cost-effective. He highlights hidden costs of self-hosting, including training, maintenance, security, and infrastructure. Huang suggests companies should only build their own AI for specific needs like data control or regulatory compliance, otherwise using commercial cloud services is simpler and more economical." datetime: "2026-07-27T18:01:16.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/293963298.md) - [en](https://longbridge.com/en/news/293963298.md) - [zh-HK](https://longbridge.com/zh-HK/news/293963298.md) --- # Jensen Huang Says 'Closed Models Are Cheaper': Here's Why Artificial intelligence has spent the last two years celebrating the rise of open models, with many businesses viewing them as a lower-cost alternative to proprietary systems from OpenAI, Anthropic and **Alphabet Inc**‘s (NASDAQ:GOOGL) (NASDAQ:GOOG) **Google**. **Nvidia Corp** (NASDAQ:NVDA) CEO **Jensen Huang** thinks that assumption is wrong. Huang argues that companies often underestimate the hidden costs of deploying open models, going as far as to say that proprietary alternatives can actually be the cheaper option. Speaking in an interview with Bloomberg Television during a visit to South Korea, Huang challenged one of the most common beliefs in enterprise AI. “Frankly, I think closed models are cheaper.” While companies often focus on licensing costs, they overlook everything required to operate an open model themselves, he explained. “If you don’t have to build yourself, if you don’t have the training yourself cost a lot of expertise to fine tune and maintain and guardrail and keep it safe and evaluated and, and of course, even build computers to host it,” Huang said, describing the engineering and infrastructure burden that comes with self-hosting AI models. For many enterprises, that means the total cost of ownership can exceed simply paying for access to a hosted proprietary model. ## OpenAI Is About Control, Not Cost While Huang pushed back on the idea that open models are inherently cheaper, he made clear he still sees an important role for them. “The reason why you need open models is because you need to have control, because you need to adapt something for your own very specialized use cases,” he said. According to Huang, companies should build their own AI only when they have compelling reasons, such as protecting proprietary knowledge, meeting regulatory requirements, or maintaining technological sovereignty. Otherwise, he suggested, using commercial models available through the cloud is often the simpler approach. Earlier in the interview, Huang said he encourages businesses—including Nvidia itself—to use services such as **OpenAI**, **Claude**, **Cursor**, **Cognition**, **Perplexity** whenever practical because “it’s just easier,” adding that companies should “build only what you must.” **Read Also: Jim Cramer Says 'First National Bank of Nvidia' Is Spooking Wall Street** ## Challenging One Of AI’s Biggest Assumptions Huang concluded that much of the debate around open versus closed AI has become overly simplistic. “I think there’s a lot of misunderstanding about closed versus open,” he said. His comments highlight a shift in how enterprise AI decisions may increasingly be made. Rather than choosing between open and closed models based solely on licensing costs, businesses may need to weigh the full expense of training, hosting, securing and maintaining AI systems over time—a calculation that, according to Nvidia’s CEO, can make proprietary models the more economical choice. **Read Also: Nvidia's Next Product Could Be Credit, Not Chips** _Image via Shutterstock_ ### Related Stocks - [NVDA.US](https://longbridge.com/en/quote/NVDA.US.md) - [NVDQ.US](https://longbridge.com/en/quote/NVDQ.US.md) - [NVDY.US](https://longbridge.com/en/quote/NVDY.US.md) - [NVDD.US](https://longbridge.com/en/quote/NVDD.US.md) - [NVDL.US](https://longbridge.com/en/quote/NVDL.US.md) - [NVDG.US](https://longbridge.com/en/quote/NVDG.US.md) - [NVD.US](https://longbridge.com/en/quote/NVD.US.md) - [NVDX.US](https://longbridge.com/en/quote/NVDX.US.md) - [NVDU.US](https://longbridge.com/en/quote/NVDU.US.md) - [NVDS.US](https://longbridge.com/en/quote/NVDS.US.md) - [NVDB.US](https://longbridge.com/en/quote/NVDB.US.md) - [NVDO.US](https://longbridge.com/en/quote/NVDO.US.md) - [NVDW.US](https://longbridge.com/en/quote/NVDW.US.md) - [NVYY.US](https://longbridge.com/en/quote/NVYY.US.md) - [NYYY.US](https://longbridge.com/en/quote/NYYY.US.md) - [DIPS.US](https://longbridge.com/en/quote/DIPS.US.md) - [MAGX.US](https://longbridge.com/en/quote/MAGX.US.md) - [SMH.US](https://longbridge.com/en/quote/SMH.US.md) - [SOXX.US](https://longbridge.com/en/quote/SOXX.US.md) - [SOXL.US](https://longbridge.com/en/quote/SOXL.US.md) - [SOXQ.US](https://longbridge.com/en/quote/SOXQ.US.md) - [XSD.US](https://longbridge.com/en/quote/XSD.US.md) - [PSI.US](https://longbridge.com/en/quote/PSI.US.md) - [FTXL.US](https://longbridge.com/en/quote/FTXL.US.md) - [07388.HK](https://longbridge.com/en/quote/07388.HK.md) - [07788.HK](https://longbridge.com/en/quote/07788.HK.md) - [09388.HK](https://longbridge.com/en/quote/09388.HK.md) - [GOOGL.US](https://longbridge.com/en/quote/GOOGL.US.md) - [GOOG.US](https://longbridge.com/en/quote/GOOG.US.md) - [SSTK.US](https://longbridge.com/en/quote/SSTK.US.md) - [NVD.DE](https://longbridge.com/en/quote/NVD.DE.md) ## Related News & Research - [Nancy Pelosi bought $3 million of NVIDIA in 2022!](https://longbridge.com/en/news/293815433.md) - [DeepSeek’s $71 Billion Boom Collides With an Awkward Nvidia Question](https://longbridge.com/en/news/293972328.md) - [Nvidia's Potential $250 Billion OpenAI Financing Deal Is Reviving a 1990s Tech Bubble Habit, Analyst Warns: 'Usually Don't End Well'](https://longbridge.com/en/news/294077412.md) - [Besi posts sharp rise in quarterly orders](https://longbridge.com/en/news/293562308.md) - [NBIS Stock Alert: What to Know as Nvidia Reveals 9.3% Stake in Nebius](https://longbridge.com/en/news/293372126.md)