AI Cost Benchmarking: Real Numbers

October 14, 2024

AI costs can range from cents to thousands of dollars for similar tasks. Understanding the real economics is essential for sustainable AI applications. These benchmarks come from production systems, not marketing materials.

Here are real AI cost numbers to inform your decisions.

Cost Landscape Overview

API Pricing (October 2024)

llm_api_pricing:
  openai:
    gpt4_turbo:
      input: "$10/1M tokens"
      output: "$30/1M tokens"
    gpt4o:
      input: "$5/1M tokens"
      output: "$15/1M tokens"
    gpt4o_mini:
      input: "$0.15/1M tokens"
      output: "$0.60/1M tokens"

  anthropic:
    claude_3_opus:
      input: "$15/1M tokens"
      output: "$75/1M tokens"
    claude_35_sonnet:
      input: "$3/1M tokens"
      output: "$15/1M tokens"
    claude_3_haiku:
      input: "$0.25/1M tokens"
      output: "$1.25/1M tokens"

  embeddings:
    openai_ada_002: "$0.10/1M tokens"
    openai_3_small: "$0.02/1M tokens"
    openai_3_large: "$0.13/1M tokens"

Real Workload Examples

workload_costs:
  chatbot_conversation:
    description: "10-turn conversation, ~500 tokens/turn"
    total_tokens: "~5,000 input + 2,500 output"

    gpt4_turbo:
      cost: "$0.125"
      per_1000_convos: "$125"

    claude_35_sonnet:
      cost: "$0.053"
      per_1000_convos: "$53"

    gpt4o_mini:
      cost: "$0.002"
      per_1000_convos: "$2"

  document_summarization:
    description: "Summarize 10-page document (~5K words)"
    tokens: "~7,000 input, 500 output"

    gpt4o:
      cost: "$0.043"
      per_1000_docs: "$43"

    claude_35_sonnet:
      cost: "$0.029"
      per_1000_docs: "$29"

  rag_query:
    description: "RAG with 5 retrieved chunks"
    tokens: "~3,000 context + 500 response"

    gpt4o:
      cost: "$0.023"
      per_10000_queries: "$230"

    gpt4o_mini:
      cost: "$0.00075"
      per_10000_queries: "$7.50"

Cost Optimization Strategies

Model Selection Impact

class CostOptimizedRouter:
    """Route queries to appropriate model based on complexity."""

    async def route_query(self, query: str, context: str) -> str:
        # Classify complexity
        complexity = await self._classify_complexity(query)

        if complexity == "simple":
            # Use mini model - 97% cheaper
            return await self.gpt4o_mini.generate(query, context)
        elif complexity == "medium":
            # Use Sonnet - 80% cheaper than Opus
            return await self.claude_sonnet.generate(query, context)
        else:
            # Use best model only when needed
            return await self.claude_opus.generate(query, context)

    async def _classify_complexity(self, query: str) -> str:
        # Use mini model for classification itself
        result = await self.gpt4o_mini.generate(
            prompt=f"Classify query complexity: simple/medium/complex\n\n{query}"
        )
        return result.strip().lower()

Caching Impact

caching_savings:
  scenario: "Support chatbot, 10K queries/day"

  without_caching:
    unique_queries: 10000
    cost_per_day: "$500"

  with_semantic_cache:
    cache_hit_rate: "60%"
    unique_queries: 4000
    cost_per_day: "$200"
    savings: "60%"

  implementation:
    - Hash exact queries for identical matches
    - Embed queries for semantic similarity
    - Cache responses for 24 hours
    - Invalidate on knowledge updates

Prompt Optimization

prompt_optimization:
  verbose_prompt:
    tokens: 500
    example: "Full instructions repeated every call"

  optimized_prompt:
    tokens: 100
    technique: "Move instructions to system prompt, reference by ID"

  savings_at_scale:
    queries_per_day: 100000
    token_savings: 400 * 100000 = 40M tokens
    cost_savings_gpt4o: "$200/day"

Batch Processing

# Individual API calls
async def process_individual(items):
    results = []
    for item in items:
        result = await llm.generate(item)  # Cold start each time
        results.append(result)
    return results

# Batch API calls
async def process_batch(items, batch_size=20):
    """Batch requests for efficiency."""
    results = []
    for i in range(0, len(items), batch_size):
        batch = items[i:i+batch_size]
        batch_results = await llm.generate_batch(batch)
        results.extend(batch_results)
    return results

# OpenAI batch API - 50% discount
async def process_with_batch_api(items):
    """Use OpenAI's batch API for async processing."""
    batch_input = create_batch_file(items)
    batch_job = await openai.batches.create(
        input_file_id=batch_input.id,
        endpoint="/v1/chat/completions"
    )
    # Results available within 24 hours at 50% cost
    return await wait_for_batch(batch_job.id)

Self-Hosting Economics

Cloud vs Self-Hosted

self_hosting_analysis:
  scenario: "1M queries/month, ~1K tokens average"

  cloud_api:
    model: "GPT-4o mini"
    cost: "$750/month"
    maintenance: "None"

  self_hosted_gpu:
    model: "Llama 3 8B"
    hardware: "A10G GPU ($1.50/hr)"
    monthly_compute: "$1,080/month"
    maintenance: "Significant"
    note: "More expensive unless very high volume"

  break_even:
    threshold: "~5M+ queries/month"
    consideration: "Factor in ML ops overhead"

When Self-Hosting Makes Sense

self_hosting_considerations:
  good_fit:
    - Data privacy requirements
    - Predictable very high volume
    - Edge/offline requirements
    - Specialized fine-tuned models

  poor_fit:
    - Variable volume
    - Need best quality
    - Limited ML ops resources
    - Fast iteration needed

Cost Monitoring

class CostTracker:
    """Track AI costs in real-time."""

    async def track_request(
        self,
        model: str,
        input_tokens: int,
        output_tokens: int,
        metadata: dict
    ):
        cost = self._calculate_cost(model, input_tokens, output_tokens)

        await self.metrics.record(
            "ai_cost",
            value=cost,
            tags={
                "model": model,
                "feature": metadata.get("feature"),
                "user_tier": metadata.get("user_tier")
            }
        )

        # Alert on anomalies
        if await self._is_anomaly(cost, metadata):
            await self.alert(
                f"Unusual AI cost: ${cost:.4f} for {metadata}"
            )

    def _calculate_cost(
        self,
        model: str,
        input_tokens: int,
        output_tokens: int
    ) -> float:
        prices = self.pricing[model]
        return (
            input_tokens * prices["input"] / 1_000_000 +
            output_tokens * prices["output"] / 1_000_000
        )

Key Takeaways

Know your costs. Optimize deliberately.