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Economic Model

An AI Product must declare its economic model — the framework by which it consumes resources and generates value.
Economic declarations ensure that consumption is transparent, predictable, and fair for all stakeholders.

Why Economic Models Matter​

  • Transparency → Consumers understand costs before adoption.
  • Sustainability → Providers can operate AI Products without hidden subsidies or risks.
  • Governance → Cost signals help regulate resource usage and risk classification.
  • Comparability → Products can be evaluated on economic as well as technical grounds.
  • Self-Service Enablement → Predictable models allow users to adopt and scale responsibly.

Components of the Economic Model​

1. Pricing Structure​

  • Fixed Pricing → Subscription or license.
  • Consumption-Based → Per API call, per token, per inference, or compute-hour.
  • Hybrid → Base subscription + usage-based fees.
  • Freemium / Open Access → Limited free tier with paid expansion.

2. Resource Consumption​

  • Compute → CPU/GPU usage, memory footprint.
  • Storage → Persistent data requirements.
  • Networking → Bandwidth usage.
  • Energy → Declared efficiency or carbon footprint (where applicable).

3. Value Exchange​

  • Direct Payment → Traditional financial exchange.
  • Tokenized Access → Credits, reputation tokens, or blockchain-based payments.
  • Reciprocal Contribution → Community-contributed data, feedback, or model improvements.

4. Governance Overlays​

  • Cost Caps → Limits to prevent runaway usage.
  • Fair Use Policies → Prevent abuse by overconsumption.
  • Risk-Based Pricing → Higher-risk uses may incur additional governance costs.

Economic Model Integration​

Example​

AI Product: Multilingual Document Summarizer

  • Pricing: $0.002 per 1,000 tokens processed.
  • Resource Consumption: 1 GPU-hour per 10,000 requests (declared efficiency).
  • Value Exchange: Enterprise licensing with optional academic free tier.
  • Governance Overlay: Monthly cap at $10,000 per client; fair use restrictions against mass scraping.

Summary​

  • Every AI Product must declare its economic model.
  • Components include pricing structure, resource consumption, value exchange, and governance overlays.
  • Economic declarations ensure predictable, sustainable, and fair consumption.

Principle: An AI Product without an economic model risks being unsustainable — and cannot enable trustworthy self-service adoption.