# Fine-tuning can beat prompting on narrow enterprise tasks

Markdown copy of https://realalpha.app/s/fine-tuning-can-beat-prompting-on-narrow-enterprise-tasks/ on Real Alpha, the best minutes from long interviews with the people building AI. Cite and link the page, not this copy.

- Speaker: [Sagar Vaze](https://realalpha.app/people/sagar-vaze/) · Sagar Vaze is a research scientist at Mistral, leading the multimodal team.
- Host: [Theo Jaffee](https://realalpha.app/people/theo-jaffee/) · Co-founder & host, MTS · One of the first members of a16z's new media team; earlier hosted the Emergent Ventures-backed Theo Jaffee Podcast.
- Host: [Sophia Dew](https://realalpha.app/people/sophia-dew/) · Host, MTS
- Show: MTS
- Episode: [Why Closed AI Providers Block Cyber Defense | Sagar Vaze](https://realalpha.app/v/gJZLJSIEbtQ/), Oct 29, 2026
- Moment: 3:26 to 5:39 of the episode (2 min), playing on https://realalpha.app/s/fine-tuning-can-beat-prompting-on-narrow-enterprise-tasks/; the episode from there: https://realalpha.app/v/gJZLJSIEbtQ/?t=206

## Quote

> “doing a small, what we call lower fine tuning, or a small fine tuning of the model on the data which we'd collected for this exact task was **way, way better**.”
> — [Sagar Vaze](https://realalpha.app/people/sagar-vaze/) at [4:39](https://realalpha.app/v/gJZLJSIEbtQ/?t=279) · MTS

## Takeaways

1. A small fine-tune beat prompt tuning on an internal classification task.
2. Company-specific data and expertise can improve model performance.
3. Older models can perform strongly on specialized coding languages.

## About this segment

Sagar Vaze shares an internal annotation experiment where fine-tuning beat prompt strategies. He says even older models can excel on specialized company tasks after customization.

From “Why Closed AI Providers Block Cyber Defense | Sagar Vaze”, Oct 29, 2026. [Watch the full episode](https://realalpha.app/v/gJZLJSIEbtQ/)

## Transcript

Transcribed by machine (Whisper) from the episode’s audio, so a word may be off here and there.

[3:30](https://realalpha.app/v/gJZLJSIEbtQ/?t=210) Why is it better for an enterprise to use a fine-tuned Mistral model rather than just using Opus or just using Astra? um so different people have different perspectives on this um i think one argument which i've seen against against our thesis is that as these models become more and more capable um the benefit of fine-tuning is going to wash away and here this is actually not something which i've seen so even with our previous generation of models on and Actual real enterprise use cases, custom tasks, fine tuning still yields huge benefits today.

[4:06](https://realalpha.app/v/gJZLJSIEbtQ/?t=246) So actually an example I like to give, it's a slightly more niche, but I think illustrates a point. Internally we have a very strong 30b model. A lot of flops went into it, which we use for sort of data annotation. This is a very simple task. Relatively we want to say, does this data belong to category A or category B? It's the kind of thing that you would imagine even models sort of two or three years ago being able to do out the box.

[4:31](https://realalpha.app/v/gJZLJSIEbtQ/?t=271) and a couple of months ago I remember running an experiment where we tried to do various prompt tuning strategies, some sort of harness around the model to boost our internal metrics. And ultimately we found that at the end, doing a small, what we call lower fine tuning, or a small fine tuning of the model on the data which we'd collected for this exact task was way, way better. So it's a very simple task.

[4:54](https://realalpha.app/v/gJZLJSIEbtQ/?t=294) Okay, sorry, it's true that the model is smaller than the frontier model of today, but it's also a very, very simple task. It's a simple classification data annotation task. And in practice, enterprise workflows are much, much more complicated. On things like, for example, specific coding languages which might be internal to a company, we're finding that even our Mistral Small from, I think it was Jan 2025, fine-tuned on these specific languages can now perform some of the best closed models.

[5:23](https://realalpha.app/v/gJZLJSIEbtQ/?t=323) So in this space, it's always difficult to make predictions many years out. But I see the advantage of fine-tuning and customizing lasting for a long time. Right. So with this niche,