Large Language Models (LLMs) are a breakthrough technology, helping fuel the AI industrial revolution. OpenAI and Anthropic are market leaders, with extraordinary private valuations. The prospect of their respective trillion-dollar public company valuations, should their initial public offerings come to fruition, has drawn attention to LLM economics.

LLMs are transforming industries including healthcare and the practice of law. They will also create entirely new industries. Geopolitical considerations also surround LLMs, as stronger models have economic, cybersecurity, and national security implications.

History offers valuable lessons for understanding the future, and some parallels exist between this AI explosion and the 19th-century Industrial Revolution.

What if LLMs become commodities, like steel?

Becoming a commodity means that something becomes more abundant and prices drop. Like steel in the late 19th century, perhaps LLMs may become commodities, too.

For legal technology businesses and the broader legal profession, this matters a lot, as both would benefit greatly from commoditization. Economic value would shift from the model builders to the model users.

That doesn’t mean every model becomes the same. Different grades of steel serve different purposes, and even as commodities, LLMs can and will vary in strength.

Let’s look at the historical parallel in the steel industry’s development.…

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