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Organizations are replacing large language models with small language models (SLMs) ranging from 1 billion to 13 billion parameters. A fine-tuned 350-million-parameter model achieved a 77% tool-calling pass rate versus ChatGPT's 26%. Serving a 7 billion parameter SLM costs 10 to 30 times less than larger models. The global SLM market is projected to surpass $20 billion by 2030.
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