Working paper
Market Design for Intelligence
A framework for contracting, clearing, dispatching and settling machine intelligence across heterogeneous compute infrastructure.
Abstract
Intelligence should be managed as a portfolio of contracted and market supply.
This paper sets out a market structure for heterogeneous intelligence supply: qualify what is permissible, compare what is capable, and contract, dispatch and settle within buyer-defined rules. The opportunity is a neutral market that connects growing intelligence demand with the capital and capacity needed to serve it.
01Why intelligence needs a market
Compute is expensive and intelligence demand varies through time. Building for the maximum strands capital; building for the average creates shortages. A market lets buyers hold a firm base and clear variability from qualified supply.
02Demand
Demand is the intelligence required by applications and customers. It has a time profile, capability profile, policy envelope and tolerance for interruption. Forecasting demand is therefore economic and technical work, not merely counting tokens.
03Supply
Supply is qualified capacity capable of producing the required intelligence. It may come from customer-owned compute, contracted sovereign capacity, other market capacity, approved hyperscale infrastructure or reserve. The order is set by buyer policy.
04Qualification
Before supply can compete on economics, it must be permitted and capable. Qualification tests model, hardware, latency, context, throughput, location, jurisdiction, security, availability, energy, provenance and contract.
05Firm capacity
Firm capacity is contractually reserved for predictable base demand. The contract design can include long-term reservation, take-or-pay, minimum consumption and availability commitments—giving buyers a durable base and suppliers a demand position to build around.
06Floating capacity
Floating capacity is flexible supply cleared as demand changes. It can cover peaks, batch workloads, temporary requirements, specialist models and economic optimisation without requiring every buyer to build for its own maximum.
07Reserves
Reserve is capacity held against failures or unexpected demand. A reserve arrangement could combine an availability payment with an activation price. It is distinct from ordinary Floating supply because its value is readiness.
08Dispatch
Dispatch assigns a workload to the selected source of supply. Routing is the physical execution mechanism beneath that decision. When demand, availability or policy changes, the eligible stack is cleared again.
09Settlement
Settlement reconciles buyer consumption, contracted capacity and supplier delivery. Capacity commitments and delivered consumption are measured against the agreed commercial terms, connecting workload dispatch to the economics of the portfolio.
10Jurisdiction
Sovereignty is the ability to control how intelligence is produced, routed and substituted. Data residency is one constraint, not the whole concept. Electricity clears on price, location and time; intelligence also clears on capability and law.
11Infrastructure finance
Credible contracted demand can make compute infrastructure financeable. Sovrgn is developing an Intelligence Offtake Agreement framework for future capacity across term, location, capability, availability, price, reserve, curtailment, spill and priority.
12International exchange
Qualified capacity can be made comparable within a buyer's permitted set. Capability, law, latency and contract determine where workloads can move—and where international intelligence exchange can grow.