Choosing a Low-Cost AI API

"Low cost" is only meaningful relative to a quality target. Before comparing prices, write down what a good-enough answer looks like for your task and build a small evaluation set of real examples. Then the question becomes concrete: what is the cheapest model that clears this bar? — which is far more useful than "what is the cheapest model?"

Smaller models can be several times cheaper per token than flagships and are often sufficient for well-defined work. Match the model to the task rather than defaulting to the most capable option:

• Classification, extraction, routing, short replies: usually a small model's territory.
• Drafting, summarisation, general assistance: often a mid-tier model.
• Hard reasoning, code, high-stakes output: a flagship may be cheaper overall by reducing retries and human fixes.

• Trim prompts: remove boilerplate and retrieve fewer, more relevant documents to cut input tokens on every call.
• Cap output length: shorter responses cost less on the pricier output side and are often clearer.
• Cache repeated content: static system prompts and reference text can qualify for cached-input discounts.
• Use batch mode for anything that tolerates asynchronous results — it is commonly discounted.

• Ignoring output length: a cheaper model that writes twice as much can cost more per task.
• Retry loops: a weak model that fails and gets called again (or requires human correction) is rarely the cheapest.
• Prompt padding: stuffing huge context "just in case" inflates every request on a cheap model too.
• Chasing headline rates: compare cost-per-successful-outcome, not cost-per-token.

Here the workload is high-volume and simple, so the deciding factor is per-token rate on a small model plus a tight output cap — a flagship would add cost with no benefit. Contrast that with a legal-summary job where a small model misses nuance: the flagship's higher rate can be the cheaper path once you count rework. Test both against your own data, then price the winner in the AI API Cost Calculator.