Documenting six facts about the structure and dynamics of the LLM market, from Mert Demirer, Andrey Fradkin, Nadav Tadelis, and Sida Peng www.nber.org/papers/w34608
Through the use of three case studies of model releases (Sonnet 3.7, Gemini 2.0 Flash, Gemini 2.5 Pro), I document three stylized facts:
1. New models are adopted quickly, with increased demand stabilizing within a few weeks.
3. There is substantial multi-homing, with users of the same app employing a mix of models.
This is still very preliminary work, so comments are welcome!