Want smarter insights in your inbox? Sign up for our weekly newsletters to get only what matters to enterprise AI, data, and security leaders.<\/em> Subscribe Now<\/em><\/p>\n\n\n\n Arcee.ai, a startup focused on developing small AI models for commercial and enterprise use, is opening up its own AFM-4.5B model for limited free usage by small companies \u2014 posting the weights on Hugging Face<\/strong> and allowing enterprises that make less than $1.75 million\u00a0in annual revenue to use it without charge under a custom \u201cAcree Model License.\u201c<\/p>\n\n\n\n Designed for real-world enterprise use, the 4.5-billion-parameter model \u2014 much smaller than the tens of billions to trillions of leading frontier models \u2014 combines cost efficiency, regulatory compliance, and strong performance in a compact footprint. <\/p>\n\n\n\n AFM-4.5B was one of a two part release made by Acree last month, and is already \u201cinstruction tuned,\u201d or an \u201cinstruct\u201d model, which is designed for chat, retrieval, and creative writing and can be deployed immediately for these use cases in enterprises. Another base model was also released at the time that was not instruction tuned, only pre-trained, allowing more customizability by customers. However, both were only available through commercial licensing terms \u2014 until now.<\/p>\n\n\n\n Acree\u2019s chief technology officer (CTO) Lucas Atkins<\/strong> also noted in a post on X that more \u201cdedicated models for reasoning and tool use are on the way,\u201d as well. <\/strong><\/p>\n\n\n\n The AI Impact Series Returns to San Francisco – August 5<\/strong><\/p>\n\n\n\n The next phase of AI is here – are you ready? Join leaders from Block, GSK, and SAP for an exclusive look at how autonomous agents are reshaping enterprise workflows – from real-time decision-making to end-to-end automation.<\/p>\n\n\n\n Secure your spot now – space is limited: https:\/\/bit.ly\/3GuuPLF<\/p>\n\n\n\n \u201cBuilding AFM-4.5B has been a huge team effort, and we\u2019re deeply grateful to everyone who supported us We can\u2019t wait to see what you build with it,\u201d he wrote in another post. \u201cWe\u2019re just getting started. If you have feedback or ideas, please don\u2019t hesitate to reach out at any time.\u201d<\/p>\n\n\n\n The model is available now for deployment across a variety of environments \u2014from cloud to smartphones to edge hardware. <\/p>\n\n\n\n It\u2019s also geared toward Acree\u2019s growing list of enterprise customers and their needs and wants \u2014 specifically, a model trained without violating intellectual property. <\/p>\n\n\n\n As Acree wrote in its initial AFM-4.5B announcement post last month: \u201cTremendous effort was put towards excluding copyrighted books and material with unclear licensing.\u201d <\/p>\n\n\n\n Acree notes it worked with third-party data curation firm DatologyAI to apply techniques like source mixing, embedding-based filtering, and quality control \u2014 all aimed at minimizing hallucinations and IP risks.<\/p>\n\n\n\n AFM-4.5B is Arcee.ai\u2019s response to what it sees as major pain points in enterprise adoption of generative AI: high cost, limited customizability, and regulatory concerns around proprietary large language models (LLMs). <\/p>\n\n\n\n Over the past year, the Arcee team held discussions with more than 150 organizations, ranging from startups to Fortune 100 companies, to understand the limitations of existing LLMs and define their own model goals.<\/p>\n\n\n\n According to the company, many businesses found mainstream LLMs \u2014 such as those from OpenAI, Anthropic, or DeepSeek \u2014 too expensive and difficult to tailor to industry-specific needs. Meanwhile, while smaller open-weight models like Llama, Mistral, and Qwen offered more flexibility, they introduced concerns around licensing, IP provenance, and geopolitical risk.<\/p>\n\n\n\n AFM-4.5B was developed as a \u201cno-trade-offs\u201d alternative: customizable, compliant, and cost-efficient without sacrificing model quality or usability.<\/strong><\/p>\n\n\n\n AFM-4.5B is designed with deployment flexibility in mind. It can operate in cloud, on-premise, hybrid, or even edge environments\u2014thanks to its efficiency and compatibility with open frameworks such as Hugging Face Transformers, llama.cpp, and (pending release) vLLM. <\/p>\n\n\n\n The model supports quantized formats, allowing it to run on lower-RAM GPUs or even CPUs, making it practical for applications with constrained resources.<\/p>\n\n\n\n Arcee.ai\u2019s broader strategy focuses on building domain-adaptable, small language models (SLMs) that can power many use cases within the same organization. <\/strong><\/p>\n\n\n\n As CEO Mark McQuade explained in a VentureBeat interview last year, \u201cYou don\u2019t need to go that big for business use cases.\u201d The company emphasizes fast iteration and model customization as core to its offering.<\/p>\n\n\n\n This vision gained investor backing with a $24 million Series A round back in 2024. <\/p>\n\n\n\n The AFM-4.5B model uses a decoder-only transformer architecture with several optimizations for performance and deployment flexibility. <\/p>\n\n\n\n It incorporates grouped query attention for faster inference and ReLU\u00b2 activations in place of SwiGLU to support sparsification without degrading accuracy.<\/p>\n\n\n\n Training followed a three-phase approach:<\/p>\n\n\n\n To meet strict compliance and IP standards, the model was trained on nearly 7 trillion tokens of data curated for cleanliness and licensing safety. <\/p>\n\n\n\n Despite its smaller size, AFM-4.5B performs competitively across a broad range of benchmarks. The instruction-tuned version averages a score of 50.13 across evaluation suites such as MMLU, MixEval, TriviaQA, and Agieval\u2014matching or outperforming similar-sized models like Gemma-3 4B-it, Qwen3-4B, and SmolLM3-3B.<\/p>\n\n\n\n Multilingual testing shows the model delivers strong performance across more than 10 languages, including Arabic, Mandarin, German, and Portuguese. <\/p>\n\n\n\n According to Arcee, adding support for additional dialects is straightforward due to its modular architecture.<\/p>\n\n\n\n AFM-4.5B has also shown strong early traction in public evaluation environments. In a leaderboard that ranks conversational model quality by user votes and win rate, the model ranks third overall, trailing only Claude Opus 4 and Gemini 2.5 Pro. <\/p>\n\n\n\n It boasts a win rate of 59.2% and the fastest latency of any top model at 0.2 seconds, paired with a generation speed of 179 tokens per second.<\/p>\n\n\n\n In addition to general capabilities, AFM-4.5B comes with built-in support for function calling and agentic reasoning. <\/p>\n\n\n\n These features aim to simplify the process of building AI agents and workflow automation tools<\/strong>, reducing the need for complex prompt engineering or orchestration layers.<\/p>\n\n\n\n This functionality aligns with Arcee\u2019s broader strategy of enabling enterprises to build custom, production-ready models faster, with lower total cost of ownership (TCO) and easier integration into business operations.<\/p>\n\n\n\n AFM-4.5B represents Arcee.ai\u2019s push to define a new category of enterprise-ready language models: small, performant, and fully customizable,<\/strong> without the compromises that often come with either proprietary LLMs or open-weight SLMs. <\/p>\n\n\n\n With competitive benchmarks, multilingual support, strong compliance standards, and flexible deployment options, the model aims to meet enterprise needs for speed, sovereignty, and scale.<\/p>\n\n\n\n Whether Arcee can carve out a lasting role in the rapidly shifting generative AI landscape will depend on its ability to deliver on this promise. But with AFM-4.5B, the company has made a confident first move.<\/p>\n Daily insights on business use cases with VB Daily<\/strong><\/p>\n If you want to impress your boss, VB Daily has you covered. We give you the inside scoop on what companies are doing with generative AI, from regulatory shifts to practical deployments, so you can share insights for maximum ROI.<\/p>\n \n\t\t\t\t\tThanks for subscribing. Check out more VB newsletters here.\n\t\t\t\t<\/p>\n An error occured.<\/p>\n<\/p><\/div>\n
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\n<\/div>Focused on enterprise customer needs<\/h2>\n\n\n\n
Company vision secures backing<\/h2>\n\n\n\n
Inside AFM-4.5B\u2019s architecture and training process<\/h2>\n\n\n\n
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A competitive model, but not a leader<\/h2>\n\n\n\n
Built-in support for agents<\/h2>\n\n\n\n
What\u2019s next for Acree?<\/h2>\n\n\n\n
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