Monday, November 10 / 12:00pm to 1:00pm Pacific Time
Andrey Fradkin | The Emerging Market for Intelligence: The Supply, Demand, and Usage of LLMs
- Hybrid
- Seminar
The DEL Seminar Series is proud to host a diverse roster of bright minds from around the world to discuss various subjects surrounding economics and technology.
On Monday, November 10, our Lab’s seminar series welcomed Andrey Fradkin, Principal Economist at Amazon, and his talk “The Emerging Market for Intelligence: The Supply, Demand, and Usage of LLMs.”
Abstract
We document new facts about the supply and demand of LLMs as measured by API usage on Microsoft’s Azure platform and on OpenRouter. We first document the rapid proliferation in the number of LLMs available, and the entry of inference providers such as DeepInfra, Fireworks, Cerebras, and Groq for open-source models.
Second, we document trends in the pricing of LLMs, showing that usage-weighted prices remain relatively flat even as the price per unit of intelligence has fallen. We also document differences in pricing between open and closed-source models. Third, we consider the adoption of LLMs. There is substantial heterogeneity in the speed of adoption across industries, firm sizes, and models. We also document the degree of multi-homing by firms and apps across models.
Finally, we study the response of demand to the entry of new and better models into the industry.
Andrey Fradkin
Digital Fellow
Andrey Fradkin is a social scientist whose research focuses on the economics of digital markets and artificial intelligence, quantitative marketing, and search and matching markets.
He is an Associate Professor of Marketing (with tenure) at the Boston University Questrom School of Business and an affiliate of the Boston University Economics Department. He is currently on leave from Boston University, working on the economics of AI at Amazon. His academic research has been published in leading marketing, economics, and computer science journals. He has provided expert input on the digital economy to the President’s Council of Advisors on Science and Technology and the Federal Trade Commission.
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