The Economics of the LLM Industry

Published: by Tedla Brandsema

A dossier on the structural and economic forces shaping competition in large language models.

Essays in This Dossier

1. The AI Race Is a Category Error

Published: by Tedla Brandsema

AI competition is not one race but many layered domains with different constraints and timelines.

2. The Inhibiting Lead

Published: by Tedla Brandsema

Early infrastructure advantage can flip into a liability when cost curves collapse faster than capital amortization.

3. The Perception Threshold

Published: by Tedla Brandsema

Technical improvements stop producing advantage once users can no longer perceive the difference.

4. Data Duality

Published: by Tedla Brandsema

Skill-forming and fact-forming data drive different kinds of model progress and are often mistaken for one another.

5. Local Parity

Published: by Tedla Brandsema

Local models become competitively viable when remaining performance gaps fall below practical perception.

6. The Control Plane Split

Published: by Tedla Brandsema

Large language models are evolving along two economic trajectories: attention capture and intent execution.