Paper Number
ICIS2025-2688
Paper Type
Short
Abstract
This study investigates whether large language model (LLM) announcements by publicly listed U.S. companies still create technological edge or have already become commoditized. Using a financial event study of 64 major LLM releases between 2017 and mid-2025, we test for abnormal stock returns of model creators and competitors. Results show that creators consistently experience positive abnormal returns, with firm size and R&D intensity as key drivers. Competitors also benefit from positive spillovers, though these effects weaken when models are released as open source. Importantly, abnormal returns remain stable over time, even after the breakthrough of ChatGPT, indicating that markets continue to treat LLM announcements as unanticipated, value-relevant information. Our findings suggest that while LLMs are evolving toward a baseline technology, financial markets still perceive releases as signals of innovation capacity rather than pure commoditization.
Recommended Citation
Pucher, Adrian and Schiereck, Dirk, "Large Language Models: Already Commoditized or Still Technological Edge? – A Financial Market Perspective" (2025). ICIS 2025 Proceedings. 36.
https://aisel.aisnet.org/icis2025/gen_ai/gen_ai/36
Large Language Models: Already Commoditized or Still Technological Edge? – A Financial Market Perspective
This study investigates whether large language model (LLM) announcements by publicly listed U.S. companies still create technological edge or have already become commoditized. Using a financial event study of 64 major LLM releases between 2017 and mid-2025, we test for abnormal stock returns of model creators and competitors. Results show that creators consistently experience positive abnormal returns, with firm size and R&D intensity as key drivers. Competitors also benefit from positive spillovers, though these effects weaken when models are released as open source. Importantly, abnormal returns remain stable over time, even after the breakthrough of ChatGPT, indicating that markets continue to treat LLM announcements as unanticipated, value-relevant information. Our findings suggest that while LLMs are evolving toward a baseline technology, financial markets still perceive releases as signals of innovation capacity rather than pure commoditization.
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