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A Scarcity of funding For open source biotechs, this leads to a wealth of support from startups, unicorns, corporations, and even venture capital firms.
Bloomberg last year Fired Its Free and Open Source Software Fund, which allocates up to $90,000 annually to various projects. In October, Indian financial services company Zerodha launched a similar initiative, called… String/boxand pledges $1 million annually to open source projects. the reason? “A large part of our success and growth is due to free and open source software,” said Zerodha CTO Kailash Nadh. He said at the time.
“It goes without saying that this applies to almost every technology company founded in the last decade, whether it is publicly acknowledged or not,” Nadah added.
While there is no shortage of companies building businesses and raising money through open source software, not every community-driven project is fit to become a commercial entity. Some open source tools are akin to Lego blocks: sure, they’re key components of a software suite, but they’re difficult to monetize directly — especially in the early days.
This is why a steady rise in funding initiatives has come to the fore. This includes Reaction Software, such as major tech companies pledging $30 million for 2022 to bolster open source security in the wake of the Log4Shell security flaw that wreaked havoc on the software supply chain. But we also see more Proactive Efforts, driven from all corners of the industry.
Silicon Valley VC Sequoia Capital Launched Open Source Fellowship in 2023 To support those responsible for the project With equity-free capital to cover living expenses for up to 12 months. Her first colleague was a Colombian software developer Sebastian Ramirez Montañocreative FastAPIAn open source web framework for building APIs.
In February, Sequoia revealed that it would begin accepting orders from… any A developer leading an open source project, with plans to provide funding for up to three eligible projects per year. Nine months later, the first two fellows from the expanded Sequoia program have now been revealed: Chat arenaa popular open source AI model evaluation tool used by many of the biggest names in the industry, including OpenAI, Meta, and Google; and vLLMan open source library focused on memory management to run the LLM service faster and cheaper.
Julie good colleagues
Chatbot Arena, which emerged from a broader research organization called LMSYSis the work of doctoral students Wei Lin Xiang and Anastasius thatgelopoulos From Berkeley Sky Computing Lab. With over 1 million monthly users, Chatbot Arena is all about helping LLM developers validate claims about the performance of their models, while… anyone They can test these models and vote for their favorites. Companies like OpenAI often share versions of their models with the Chatbot Arena team before the models are released to help improve things before they officially launch.
While Chatbot Arena receives funding as part of the creators’ doctoral research work at Sky Computing Lab, Sequoia’s $100,000 fellowship award will help fund further technical development, including building a better interface.
“The Sequoia grant supports the development of the Chatbot Arena website, covering full development and server maintenance costs,” Chiang told TechCrunch. “This is a gift to support the open source project, with no future commitments.”
Sequoia isn’t the only venture capital firm offering equity-free backing to Chatbot Arena; Andreessen Horowitz has launched an open source AI grant program Last AugustChatbot Arena’s LMSYS group was among The second group of beneficiaries.
Chiang said there are no plans to develop the project into a commercial entity, underscoring the need for alternative financing sources — now, and perhaps long into the future.
“As part of our long-term vision, we may establish a non-profit organization to host the leaderboard, while maintaining our focus on broad accessibility and community impact,” Chiang said.
Alongside, Berkeley’s Sky Computing Lab also created a vLLM in 2022, led by researchers Chuhan Lee, Wooseok Kwonand Simon Mowho started the project after developing a system to distribute complex operations across multiple GPUs more efficiently. vLLM is based on a new “attention algorithm” called PagedAttention, which helps reduce memory waste and is already used by developers at companies like AWS, Cloudflare, and Nvidia.
Similar to Chatbot Arena, vLLM serves as a focal point for its creators’ doctoral research work, and future commercialization is not currently on the agenda.
“Right now, we don’t have a plan to turn it into a standalone company — we’re just focused on making the open source project useful and widely adopted,” Mo said.
In addition to Sequoia’s $100,000 contribution for this year, Other public sponsors Include Andreessen Horowitz, who Donated as part of An open source AI grant program was opened last year, while the likes of AWS, Nvidia and others have collectively helped vLLM cover its compute resources – which are not insignificant.
“For vLLM, we intend to use the fund to cover continuous integration testing and the standards set,” Mo said. “Maintaining these clusters, which run on GPUs, is expensive but necessary to ensure the performance and correctness of vLLM for production use.”
One clear message emerges from all of this: AI and data infrastructure may be driving demand for open source technologies, but that demand creates significant costs for project maintainers. Ion StoicaThe funding pressure on those behind open source projects is “at least an order of magnitude higher” with the advent of MBAs, says the Berkeley Computer Science Department professor and Sky Computing Lab advisor.
“You have multiple types of GPUs, you have all these other accelerators, and there’s also a difference in size,” he said. “Ten years ago, most of the funding for a new startup went into adding people; today, it’s about infrastructure.”
coordination
If we dig a little deeper, it’s clear that Sequoia’s involvement isn’t quite as altruistic as it might seem, given the fact that her two new colleagues intersect with startups in her existing portfolio. For example, vLLM is used by repetitionwhich Sequoia (and Andreessen Horowitz) backed. Its A series and Series B rounds.
Elsewhere, last year Sequoia co-led a $5 million seed round for an AI startup called factorywith the startup’s founder and CTO Eno Reyes He confirmed that his company uses Chatbot Arena to “closely track” the best LLM options.
“It’s an essential input to make sure we have the best product for our users,” Reyes said.
Likewise, last year’s first Sequoia Fellowship award, FastAPI, relies heavily on this Pianticthe popular data validation library created by the startup that bears its name in the Sequoia portfolio.
However, partner Sequoia Capital Lauren Reeder She told TechCrunch that this cross-pollination between colleagues and portfolio isn’t a strict requirement for her funding decisions, but rather just a “nice bonus” when things are… He does Align. In fact, when an open source project gets really popular, there’s a good chance it will be picked up by one of Sequoia’s portfolio companies, which is a good way for a VC firm to recognize worthwhile projects.
Regarding how funding is distributed, Reeder says that the scope is open to whatever suits the team in question. For FastAPI, this involved making a direct payment to Montaño himself, which was simpler since he was just one individual. But when teams get involved, it makes sense to use a third-party fundraising platform Like Open Collectivewhich also comes with added transparency.
“For the last two fellows, we were supporting small groups rather than one individual, and Open Collective made it easier to manage the funds,” Reeder said. “Similarly, we pay both upfront payments as multi-installation payments, depending on the needs of the project. Open Collective is more transparent, but the fees are not as small.”
Take the pledge
There have been several other efforts to formalize funding for open source projects in the past five years alone, including funds for free and open source software from actually and Sales forcewhich is an implicit acknowledgment that important components of the technology stack demand support.
However, one of the biggest recent efforts has come from developer tools Unicorn Sentry, which has been donating to open source projects for many years. In 2021, Sentry A A more systematic programme With more firm and transparent commitments, the company last month It has been officially launched the Open source pledge To encourage other businesses to participate – either by donating directly through platforms such as Github sponsors or Thanks. DaveOr indirectly through institutions.
“We’ve been running our program successfully for three years, but it’s not enough on its own to solve the open source sustainability crisis. So this year David (Sentry co-founder David Kramer“I was asked to engage other companies to make a bigger impact,” said Head of Open Source at Sentry, Chad WhitakerTechCrunch said.
So the rules of engagement are: Commitments must reach at least $2,000 per year for each developer working for the member company, which for Sentry itself translated to about $500,000 last year — $3,704 for each of its 135 developer employees. Beneficiaries over the years have included Django, Python, Rust, and Apache. This year, Sentry has It raised its own budget to $750,000And about twenty more Members Having signed the pledge at the time of writing, Whitacre hopes open source developers will receive more compensation in the future.
“The primary goal of the pledge is to provide no-strings-attached payments to open source maintainers,” Whittaker said. “We screen companies when they join to ensure they comply with our requirements Guidelinesbut there is a fair amount of freedom within those guidelines.
Apart from corporate members contributing money, the pledge has also attracted “ecosystem partners” to them Endorsement of the pledgeWhich includes institutions, individuals and even floors VC Accel Companywhich has invested in several open source startups over the years (including Sentry, both before and after the shift away from open source licensing). In 2019).
Axel’s partner Dan Levin If something is “truly critical,” he said, it should, in theory, be able to sustain itself as a business. However, the truth is that if there are enough companies and developers deriving value from a given open source project, there won’t be any problems getting financial support – at least in the early days, before maintainers can make their way to commercialization. Commercial. .
“In the case of open source software, even though it can be used for free, users who find it necessary have an inherent motivation to ensure its sustainability,” Levin told TechCrunch. “The open source community, especially on the demand side, needs to reevaluate their strategies and make more informed decisions to support important projects. The pledge is an excellent effort to incentivize the demand side to do what is in their best interest.”
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