The REAL cost of LLM (And How to reduce 78%+ of Cost)
AI Summary
- Incident Summary:
- On December 1st, a normal Friday afternoon, the author received an email from OpenAI indicating a $5,000 API usage limit was reached in just one afternoon, which was abnormal.
- Autonomous Sales Agent Development:
- The author was developing an autonomous sales agent capable of researching, outreaching, and auto-replying to clients.
- The agent was designed to be hyper-personalized by gathering data from various sources like Google, LinkedIn, and web scraping.
- An infinite loop occurred when one sales agent contacted another, leading to the massive bill.
- AI Startup Costs:
- Traditional software companies don’t usually account for large language model costs, but AI startups must.
- The author learned about these costs through a side project involving an AI girlfriend or AI companion app.
- The app charged $1 per minute for voice chat and saw significant sales, but the cost of free trials made it hard to break even.
- Cost Optimization Strategies:
- The author explored methods to reduce large language model costs while maintaining performance.
- Strategies included using smaller models for specific tasks, cascading models to handle questions based on complexity, and using routers to direct queries to the most cost-effective model.
- Other methods involved optimizing agent memory and using smaller models to summarize content before passing it to more expensive models.
- Monitoring and Optimization Tools:
- Tools like L Smiths help monitor and log costs, enabling targeted cost optimization.
- The author demonstrated how to use L Smiths to reduce the cost of a research agent by over 70% by summarizing scraped web content with a cheaper model before using a more expensive model for final processing.
- Conclusion:
- The author emphasizes the importance of understanding and managing large language model costs for AI startups.
- Cost optimization is not only technical but also requires a deep understanding of business workflows.
- The author recommends courses like AI for Marketers from HubSpot Academy to understand AI adoption in marketing workflows.