Definition
Model Economics
The revenue and cost breakdown for a specific AI model (e.g., GPT-4o vs Claude Sonnet), showing margin per model.
Formula: Model Margin = Model Revenue - Model Costs
Worked example
GPT-4o generates $10K revenue but costs $4K = 60% margin. Claude Sonnet generates $8K revenue at $2K cost = 75% margin.
Related
- Cost Intelligence→ (how Bear Lumen applies this)
- Token Cost Attribution
- All definitions