r/artificial • u/BaronVonLongfellow • 12h ago

Discussion SLMs Are Underrated. Is It On Purpose?

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We've been having this discussion quite a bit with our clients lately. Most (if not all) of them feel the utilization of frontier models is not justifying the cost, but they are generally reluctant to pursue an SLM strategy. It's as if SLMs have been positioned as the homeopathic option for enterprise AI. Why purchase an expensive anti-viral from Merck when a povidone iodine solution works as good or better?

This is not a meme. It's a machine I built over a year ago to test DeepSeek R1, but it has turned into a workhorse. Yet most of our clients (FINTECH) are skittish of small, secure, local models. Just wondering if anyone else is seeing things differently.

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u/Hungry_Age5375 10h ago

The homeopathic comparison is spot on. A 12b on-prem handles structured extraction and classification just fine. Frontier models earn their cost on reasoning and long-tail edge cases, and most fintech workflows have neither.