IT cos bet big on SLMs for GenAI push

Cost Advantage

♦ Clients looking at saving cost through GenAI implementation

♦ LLMs prove to be expensive, which lack specific biz solution

♦ SLMs can be better options, some experts feel

Bengaluru: As technology firms rush to integrate generative AI (GenAI) solutions in all their offerings, the debate over LLMs (Large Language Models) versus SLMs (Small Language Models) have surfaced.

Enterprises are evaluating the cost aspect of implementing GenAI solutions more closely now as the initial enthusiasm leads to realist calculations.

According to analysts, despite LLMs being the foundation of any GenAI model, the practical use cases for business outcomes remain a far cry. Therefore, clients are looking at low cost implementation of GenAI solutions for cost savings.

Notably, LLMs use huge amount of data and require higher computing power and storage. In comparison, SLMs use less amount of data, which are specific to the problem that the application is trying to solve. It is relatively cost effective than LLMs due to less use of computing power and cloud storage among others.

“Although LLM is more powerful in terms of achieving outcomes at a much wider spectrum, it hasn’t achieved full-scale deployment at the enterprise level due to complexity. Use of high-cost computational resource (GPU vs CPU) varies directly with the degree of inference that needs to be drawn from a dataset. Trained over a focused dataset with a defined outcome, SLM could be a better alternative in certain cases such as deploying applications with similar accuracy at the Edge level,” Brokerage firm, Prabhudas Lilladher wrote in a note.

“Enterprises might gauge a value proposition that can be achieved with the usage of both these alternatives (SLM vs LLM) and the corresponding benefits that can fairly exceed the estimated cost involved,” the report noted.

According to sources in the know, clients are not seeing much cost advantage in GenAI implementation yet.

“Many projects are not moving beyond PoC (proof of concept) levels in the GenAI space owing to cost considerations. That is the reason that technology firms have started evaluating the option of leveraging SLMs for making the applications cost effective,” said an official working on GenAI projects.

“It’s like cloud migration. Initially, cloud migration was considered to be cost saving in nature, which is actually not the case in many projects,” she added.

“Enterprises might gauge a value proposition that can be achieved with the usage of both these alternatives (SLM vs LLM) and the corresponding benefits that can fairly exceed the estimated cost involved,” the Prabhudas Lilladher’s note said.

Meanwhile, IT services companies globally are upping the ante in the GenAI space to have a first mover advantage.