In this article we analyze the commoditization of foundation model APIs, showing how parity in capability metrics is reshaping competitive dynamics across the AI stack in 2025. Using a mixed-methods approach combining benchmark analysis, cost modeling, and market trend evaluation, we identify three dominant research questions: (RQ1) How have benchmark scores converged across leading frontier mo...
Category: AI Economics
AI Economics: Risk, Cost, and ROI Research by Oleh Ivchenko
Shadow Banking Detection with Graph Neural Networks: Mapping Unofficial Lending Networks
Shadow banking has emerged as a critical stress point in the global financial system, enabling credit expansion outside regulated intermediation. This article develops a graph‑based anomaly detection framework that maps unofficial lending networks using transaction‑level data from Eastern European regulatory pilots. By treating financial entities as nodes and payment flows as weighted edges, we...
Opportunity Cost of AI Waiting: Economic Modeling of Delayed Enterprise AI Adoption
Enterprises that delay AI adoption face a measurable competitive disadvantage that can be quantified in economic terms. This article answers three research questions: (RQ1) What is the average competitive disadvantage cost for enterprises that delay AI adoption by 12–24 months relative to early adopters? (RQ2) Which industry sectors exhibit the highest cost differentials? (RQ3) What are the mac...
AI-Driven Market Concentration: Measuring Oligopoly Risk in Foundation Model Economics
Foundation models are increasingly central to digital economies, yet their market structure remains sparsely quantified. This article asks how economic dynamics of winner‑take‑all markets manifest in the foundation‑model sector, what barriers to entry shape competitive equilibrium, and how switching costs influence firm behavior. We address these questions through a three‑pronged empirical stra...
The Inference Cost Collapse: Economic Implications of 10x Annual Price Reductions for LLM APIs
Academic Citation: Ivchenko, Oleh, Ivchenko, Iryna (2026). The Inference Cost Collapse: Economic Implications of 10x Annual Price Reductions for LLM APIs. Research article: The Inference Cost Collapse: Economic Implications of 10x Annual Price Reductions for LLM APIs. Odessa National Polytechnic University, Department of Economic Cybernetics. DOI: 10.5281/zenodo.21363672 · View on Z...
OSS AI License Compliance: Legal Risks and Enterprise Obligations Under Custom AI Licenses
This article investigates the legal ramifications of non‑OSI‑approved AI licenses promulgated by major technology firms—including Meta’s Llama, Falcon, and Anthropic’s Claude—on enterprise adoption of open‑weight models. We frame the problem through three research questions: (RQ1) What contractual and regulatory obligations arise when deploying models distributed under custom licenses? (RQ2) Ho...
AI Wage Premium Evidence: Measuring Productivity Uplift and Salary Effects in Knowledge Work
The rapid adoption of artificial intelligence (AI) technologies in knowledge-intensive industries has sparked debate about its impact on compensation structures and wage inequality. This article investigates whether AI tools increase or decrease salary differentials across skill levels and firm sizes, focusing on empirical evidence from firms with high AI penetration. We pose three research que...
Cash Flow Anomaly Detection: AI Models for Identifying Undeclared Income in SME Tax Returns
Unreported income among small and medium enterprises (SMEs) remains a critical challenge for tax authorities globally, with recent studies indicating that undeclared income accounts for 15-25% of the tax gap in European OECD nations. This article addresses the gap in current tax compliance tools by developing and evaluating machine l[REDACTED]g models specifically designed to detect anomalous c...
Total Cost of Ownership for Enterprise LLMs: A 2025 Framework Beyond GPU Cost
Enterprise adoption of large language models (LLMs) has progressed from experimental pilots to core production workloads, yet most organizations continue to compute return on investment (ROI) using GPU‐hour pricing as the sole cost driver. This narrow view systematically underestimates the true economic burden of LLMs, omitting fine‑tuning expenses, retrieval‑augmented generation (RAG) infrastr...
AI-Driven Tax Compliance: How Explainable AI Transforms Shadow Economy Detection
Shadow economies impose massive revenue losses on governments worldwide, yet detecting illicit financial activity remains a persistent challenge. Traditional statistical and rule‑based methods often lack the interpretability needed for regulators to trust automated alerts. Recent advances in Explainable Artificial Intelligence (XAI) offer a pathway to illuminate decision‑making processes, enabl...