# Demand for LLMs: Descriptive Evidence on Substitution, Market Expansion, and Multihoming

arXiv: https://arxiv.org/abs/2504.15440 · HTML: https://mlsanity.com/paper/2504.15440/

## Key facts

- Cited by 3 papers in the map (data through 14 Oct 2026).
- Builds on 0 of its 4 references that are in the map.
- First posted on arXiv 21 Apr 2025.

## Built on by (most cited first, 3 of 3)

- [The Price of Progress: Price Performance and the Future of AI](https://mlsanity.com/paper/2511.23455/) (2025)
- [LLM Performance for Code Generation on Noisy Tasks](https://mlsanity.com/paper/2505.23598/) (2025)
- [How Organizations Use AI: Evidence from ChatGPT](https://mlsanity.com/paper/2608.12236/) (2026)

## Abstract (arXiv)

This paper documents three stylized facts about the demand for Large Language Models (LLMs) using data from OpenRouter, a prominent LLM marketplace. First, new models experience rapid initial adoption that stabilizes within weeks. Second, model releases differ substantially in whether they primarily attract new users or substitute demand from competing models. Third, multihoming, using multiple models simultaneously, is common among apps. These findings suggest significant horizontal and vertical differentiation in the LLM market, implying opportunities for providers to maintain demand and pricing power despite rapid technological advances.