As the battle for dominance in the LLM market intensifies, understanding their potential trajectory as commodities becomes crucial. Ken Crutchfield’s exploration of historical parallels with steel provides vital insights for the legal profession.
Large Language Models (LLMs) have transformed industries including healthcare and the practice of law, while also creating entirely new ones. The technology is at the forefront of the AI industrial revolution, drawing comparisons to the 19th-century Industrial Revolution driven by steel.
Crutchfield draws a parallel between LLMs and steel, suggesting the possibility that LLMs may eventually become commodities. Steel’s trajectory saw a shift in economic value from producers to users, leading to a broad increase in the material’s applications and facilitating advances in sectors like construction and automotive manufacturing.
The success of Andrew Carnegie’s steel empire exemplified how commoditization can spur innovation and growth. His embrace of the Bessemer process in the late 1860s and the subsequent projects it enabled—such as the Eads Bridge across the Mississippi—mirrored this trajectory. In a similar vein, LLMs can potentially democratize access to advanced AI capabilities, driving innovation across various sectors.
In the legal technology space, further commoditization of LLMs could shift the focus from the development of models to their application. Much like how steel enabled diverse businesses to thrive, LLMs could become a general-purpose input into SaaS applications within legal tech, fostering growth in “wrapper” businesses that add value through specialized applications.
For legal professionals, this prospect holds significant potential. By capitalizing on commoditized LLMs, legal tech firms could enhance feature sets, improve client services, and increase profitability. If the cost of LLMs decreases due to commoditization, the legal industry may transform in a way akin to the early 20th-century automotive industry, evolving with better margins and greater value driven by innovation.
Crutchfield does caution, however, that the steel-LLM analogy is not without its limitations. Issues such as protectionism highlight the complexity of controlling software and LLMs compared to traditional commodities. OpenAI and Anthropic could face challenges if competition leads to price reductions, potentially necessitating government involvement akin to historical protections afforded to the steel industry.
As the conversation around LLM commoditization develops, legal professionals should monitor these technological and economic shifts and consider new strategies for leveraging LLMs in ways that maximize value.
For further insights, the original article by Ken Crutchfield can be accessed here.