Cost Optimization: Caching, Model Selection, Quantization

AI Navigate Original / 4/27/2026

💬 OpinionDeveloper Stack & InfrastructureTools & Practical Usage
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Key Points

  • LLM production cost balloons cumulatively; optimize 5-10x
  • Prompt caching (static prefix→dynamic tail), model cascade, batch API
  • Context compression, reranker, quantization, distillation, short prompts
  • Big three: caching + cascade + compression; monitor effects

Why Cost Optimization Matters

An LLM product's production cost becomes huge cumulatively. Even a few yen per request becomes millions to hundreds of millions of yen/month with users × frequency × 365 days. Being conscious of optimization can be 5-10x more efficient.

1. Prompt Caching

A mechanism cutting input-token cost up to 90% when reusing the same system prompt.

  • Anthropic: explicit via cache_control parameter
  • OpenAI: automatic caching (when the same prefix hits a certain number of times)
  • Google: Context Caching

The effect is enormous in cases like agent operation or RAG where the system prompt and tool definitions are long.

⚠️ Cache-invalidation pitfall: mixing dynamic elements like datetime, username, session ID at the prompt head causes cache misses, applying normal new-token pricing. The fix is to design "static prefix → dynamic tail." In ProjectDiscovery's actual case, just moving working memory to the end of the message cut LLM cost by 59%.

2. Model Cascade

Selectively use multiple models in one app:

  • Light (Mini, Nano, Haiku): classification, routing, simple extraction
  • Mid (Sonnet, Mistral Large, Gemini Flash): daily work, summary, translation
  • Frontier (GPT-5, Claude Opus 4.7): complex reasoning, code gen, agent commander

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Cost Optimization: Caching, Model Selection, Quantization | AI Navigate