IBM CEO: open-weight models now cost 10-25% of frontier token cost and are ~90% as effective
AspireAI community · The Register
On IBM's Q3 2026 earnings call, CEO Arvind Krishna told investors that open-weight models now cost "anywhere from 25 percent to 10 percent of the token cost" of frontier models while being "now 90 percent as effective." He traced the gap narrowing over time: in 2024 a broad benchmark could score a closed frontier model around 70 with an open model at 20 or 30; by late 2025 he said that had closed to roughly 70 versus 50. The tasks he named as adequate on the cheaper answer were summarising an email, examining a contract, answering a customer call and composing an email. He added that most businesses could build useful on-prem AI in "two or three racks," and predicted on-prem demand would help IBM's Spyre accelerator cards and z17 mainframes, where he said revenue came in $1bn above any previous model generation while overall mainframe revenue fell 20 percent. The honest caveat: this is one CEO characterising his own company's deployments, not an independent benchmark. No model names, test suite or token-cost assumptions were published, so the 90 percent figure should be read as a vendor-side claim rather than a measured result. Source: The Register, Oct 22 2026.
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Two sparse-autoencoder analyses have resisted scaling: matching semantically similar features across layers, and compressing large feature circuits into interpretable supernodes. This paper argues both are the same underlying problem, estimating semantic distances between SAE features that sit on different activation manifolds. Its representation treats each feature not as a single decoder vector but as an activation-weighted distribution over the hidden states expressing it, projects those distributions into a shared reference space, and compares them with Wasserstein distance. The representation is proved invariant to activation rescaling and stable under perturbation, and recovers true matches under finite-sample margin conditions. Empirically it outperformed decoder-vector and LLM-based baselines and captured subtle functional distinctions between related features, and it compressed large feature circuits into interpretable supernodes automatically. The limitation is that this is interpretability tooling: the paper demonstrates better feature matching and circuit compression, not that downstream interpretability claims become more accurate.