On August 12, AT&T Inc. (NYSE:T) Chief Data and AI Officer Andy Markus said OpenAI models already power about 25% of the telecom’s total AI usage, with a target of 70% to 80% over time.
On the other hand, NVIDIA Corporation (NASDAQ:NVDA) CEO Jensen Huang has spent the past month leading a consortium of companies championing open-weight AI more broadly.
Why This Matters
AT&T’s embrace of cheap open AI models and Nvidia’s public cheerleading for the same trend are both bets that open models won’t hurt the broader AI economy.
That raises the real question: does the open-weight wave actually threaten the AI infrastructure buildout, or does it just reroute where the money flows?
Photo by Robb Miller on Unsplash
The Bull and Bear Case: AT&T
Switching from closed, proprietary models to open ones cut AT&T Inc. (NYSE:T)’s costs by 80% to 90% in certain applications. The company processes an average of 45 billion AI tokens a day through a “smart router” that picks the cheapest suitable model for each task. Markus said, “we’re not scared of the token future.” AT&T also built its own customized open model, OTel, and says its AI initiatives have delivered a fivefold return on investment this year.
Some of the open models AT&T Inc. (NYSE:T) experiments with come from China, the same category of model that critics say raises national security concerns given state backing for Chinese AI development. Gartner analyst Chirag Dekate noted that even enterprises betting heavily on premium proprietary models eventually hit an unsustainable cost inflection point. It is a reminder that today’s open-model savings could face their own future cost pressures too.
The Bull and Bear Case: NVIDIA Corporation (NASDAQ:NVDA)
Cerebras CEO Andrew Feldman said, “there is no reason for chip stocks to go down when open-source models come out.” The reasoning rests on the Jevons paradox: if AI gets cheaper to run, people tend to use far more of it, not less, which can eat up just as much computing power as before. Cloud and chip companies profit either way, since open-weight models still need infrastructure to run on.
NVIDIA Corporation (NASDAQ:NVDA)’s open-weight cheerleading rests on an unproven assumption that usage grows enough to offset any efficiency gains. If large enterprises broadly shift toward smaller, cheaper open models that genuinely need less compute per query, chip demand growth could slow even as usage volumes rise.
Insider Monkey’s Hedge Fund Data
AT&T Inc. (NYSE:T) was held by 72 hedge funds as of Q1 2026, down from 77. NVIDIA Corporation (NASDAQ:NVDA) was held by 275, up from 264.
Conclusion
AT&T and Nvidia are both betting that cheaper AI means more AI overall, not less spending, and so far the early evidence backs both of them up.
While we acknowledge the risk and potential of T as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than T and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
