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Abstract Global climate models parameterize a range of atmospheric‐oceanic processes, including gravity waves (GWs), clouds, moist convection, and turbulence, that cannot be sufficiently resolved. These subgrid‐scale closures for unresolved processes are a substantial source of model uncertainty. Here, we present a new approach to developing machine learning (ML) parameterizations of small‐scale climate processes by fine‐tuning a pre‐trained AI foundation model (FM). FMs are largely unexplored in climate research. A pre‐trained encoder‐decoder from a 2.3 billion parameter FM (NASA and IBM Research's Prithvi WxC)—which contains a latent probabilistic representation of atmospheric evolution—is fine‐tuned (or reused) to create a deep learning parameterization for atmospheric gravity waves (GWs); a process unseen during pre‐training. The parameterization captures GW effects for a coarse‐resolution climate model by learning the fluxes from an atmospheric reanalysis with 10 times finer resolution. A comparison of monthly averages and instantaneous evolution with a machine learning model baseline (an Attention U‐Net) reveals superior predictive performance of the FM parameterization throughout the atmosphere, even in regions excluded during pre‐training. This performance boost is quantified using the Hellinger distance, which is 0.11 for the baseline and 0.06 for the fine‐tuned model. Our findings emphasize the versatility and reusability of FMs, which could be used to accomplish a range of atmosphere‐ and climate‐related applications, leading the way for the creation of observations‐driven and physically accurate parameterizations for more earth system processes.