LLM Cost Optimization
SkillCloud & infraReduce LLM API and infrastructure costs through model selection, prompt caching, batching, caching, quantization, and self-hosting strategies. Track spend by team and model, set budgets, and implement cost-aware routing.
Available today. Use it from your connected AI after setup.
No other account needed.
Connect ahel once, and every AI you use reads what you have installed.
Then ask your AI: use the LLM Cost Optimization skill
What this skill tells your AI
The instructions your AI receives, as published by bagelhole/devops-security-agent-skills in devops/ai/llm-cost-optimization/SKILL.md and read by ahel’s review.
Cut LLM costs by 50–90% with the right combination of caching, model selection, prompt optimization, and self-hosting.
When to Use This Skill
Use this skill when:
- LLM API spend is growing faster than revenue
- You need to attribute AI costs to teams, products, or customers
- Implementing caching to avoid redundant LLM calls
- Deciding when to switch from API providers to self-hosted models
- Optimizing prompt length without sacrificing quality
Cost Levers by Impact
| Strategy | Typical Savings | Effort |
|---|---|---|
| Semantic caching | 20–50% | Low |
| Model right-sizing | 30–70% | Low |
| Prompt compression | 10–30% | Medium |
| Provider caching (prompt cache) | 10–25% | Low |
| Batching offline workloads | 50% (Batch API) | Medium |
| Self-hosting 7–8B models | 80–95% at scale | High |
| Quantization | 30–50% VRAM cost | Medium |
Track Costs First
# Use LiteLLM's cost tracking (automatic per-model pricing)
import litellm
response = litellm.completion(
model="gpt-4o-mini",
messages=[{"role": "user", "content": "Hello"}],
)
cost = litellm.completion_cost(response)
print(f"Cost: ${cost:.6f}")
# Add custom cost callbacks
def log_cost(kwargs, completion_response, start_time, end_time):
cost = kwargs.get("response_cost", 0)
model = kwargs.get("model")
user = kwargs.get("user")
# Send to your analytics DB
db.record_cost(user=user, model=model, cost=cost)
litellm.success_callback = [log_cost]
Model Right-Sizing
# Route by task complexity — don't use GPT-4o for everything
def get_model_for_task(task_type: str) -> str:
routing = {
"classification": "gpt-4o-mini", # ~30× cheaper than gpt-4o
"summarization": "gpt-4o-mini",
"extraction": "gpt-4o-mini",
"simple_qa": "gpt-4o-mini",
"complex_reasoning": "gpt-4o",
"code_generation": "claude-sonnet-4-6",
"creative_writing": "claude-opus-4-6",
}
return routing.get(task_type, "gpt-4o-mini")
# Cost comparison (per 1M tokens, 2025 approx.)
# gpt-4o-mini: input $0.15 / output $0.60
# gpt-4o: input $2.50 / output $10.00
# claude-sonnet-4-6: input $3.00 / output $15.00
# llama-3.1-8b (self): ~$0.05–0.10 all-in (GPU amortized)
Prompt Caching (Provider-Side)
# Anthropic — cache long system prompts (saves 90% on cached tokens)
import anthropic
client = anthropic.Anthropic()
response = client.messages.create(
model="claude-sonnet-4-6",
max_tokens=1024,
system=[
{
"type": "text",
"text": "You are a helpful assistant.",
},
{
"type": "text",
"text": open("large-context.txt").read(), # large doc
"cache_control": {"type": "ephemeral"}, # cache this!
}
],
messages=[{"role": "user", "content": "Summarize the key points."}],
)
# First call: full price. Subsequent calls: 90% discount on cached part.
print(f"Cache read tokens: {response.usage.cache_read_input_tokens}")
# OpenAI — prompt caching is automatic for repeated prefixes >1024 tokens
# No code change needed; check usage.prompt_tokens_details.cached_tokens
Batching with OpenAI Batch API (50% Discount)
import json
from openai import OpenAI
client = OpenAI()
# Prepare batch requests
requests = [
{
"custom_id": f"task-{i}",
"method": "POST",
"url": "/v1/chat/completions",
"body": {
"model": "gpt-4o-mini",
"messages": [{"role": "user", "content": f"Classify: {text}"}],
"max_tokens": 50,
}
}
for i, text in enumerate(texts)
]
# Write JSONL file
with open("batch.jsonl", "w") as f:
for req in requests:
f.write(json.dumps(req) + "\n")
# Upload and create batch
batch_file = client.files.create(file=open("batch.jsonl", "rb"), purpose="batch")
batch = client.batches.create(
input_file_id=batch_file.id,
endpoint="/v1/chat/completions",
completion_window="24h",
)
print(f"Batch ID: {batch.id}") # poll status with client.batches.retrieve(batch.id)
Semantic Caching
import hashlib
import json
import redis
import numpy as np
from sentence_transformers import SentenceTransformer
r = redis.Redis(host="localhost", port=6379)
embed_model = SentenceTransformer("BAAI/bge-small-en-v1.5")
SIMILARITY_THRESHOLD = 0.92
CACHE_TTL = 3600 * 24 # 24 hours
def cached_llm_call(prompt: str, llm_fn) -> str:
# 1. Exact match (free)
exact_key = f"exact:{hashlib.sha256(prompt.encode()).hexdigest()}"
if cached := r.get(exact_key):
return cached.decode()
# 2. Semantic match
query_vec = embed_model.encode(prompt)
cached_keys = r.keys("sem:*")
for key in cached_keys:
data = json.loads(r.get(key))
similarity = np.dot(query_vec, data["embedding"]) / (
np.linalg.norm(query_vec) * np.linalg.norm(data["embedding"])
)
if similarity >= SIMILARITY_THRESHOLD:
return data["response"]
# 3. Cache miss — call LLM
response = llm_fn(prompt)
# Store exact match
r.setex(exact_key, CACHE_TTL, response)
# Store semantic embedding
sem_key = f"sem:{hashlib.sha256(prompt.encode()).hexdigest()}"
r.setex(sem_key, CACHE_TTL, json.dumps({
"embedding": query_vec.tolist(),
"response": response,
"prompt": prompt,
}))
return response
Prompt Compression
# LLMLingua — compress long prompts by 3–20× with minimal quality loss
from llmlingua import PromptCompressor
compressor = PromptCompressor(
model_name="microsoft/llmlingua-2-bert-base-multilingual-cased-meetingbank",
device_map="cpu",
)
compressed = compressor.compress_prompt(
long_context,
ratio=0.5, # keep 50% of tokens
rank_method="longllmlingua",
)
print(f"Original: {len(long_context.split())} words")
print(f"Compressed: {len(compressed['compressed_prompt'].split())} words")
print(f"Savings: {compressed['saving']}")
Self-Hosting Break-Even Calculator
def break_even_analysis(
monthly_api_spend_usd: float,
gpu_cost_per_hour_usd: float = 2.50, # e.g., A10G on AWS
utilization: float = 0.70, # 70% GPU utilization
) -> dict:
monthly_gpu_cost = gpu_cost_per_hour_usd * 24 * 30 * utilization
break_even = monthly_gpu_cost / monthly_api_spend_usd
recommendation = (
"Self-host now — strong ROI" if break_even < 0.5 else
"Self-host if traffic grows 2×" if break_even < 0.8 else
"Stick with API — not enough scale yet"
)
return {
"monthly_gpu_cost": f"${monthly_gpu_cost:.0f}",
"monthly_api_spend": f"${monthly_api_spend_usd:.0f}",
"gpu_as_pct_of_api": f"{break_even*100:.0f}%",
"recommendation": recommendation,
}
# Example: $5k/month on OpenAI, $2.50/hr A10G
print(break_even_analysis(5000))
# → gpu_cost ~$1,260/mo = 25% of API spend → self-host now
Cost Dashboard (Grafana)
# Emit cost metrics to Prometheus
from prometheus_client import Counter, Histogram
llm_cost_total = Counter(
"llm_cost_usd_total",
"Total LLM spend in USD",
["model", "team", "task_type"],
)
llm_tokens_total = Counter(
"llm_tokens_total",
"Total tokens used",
["model", "token_type"], # token_type: prompt, completion, cached
)
def track_call(model, team, task_type, response):
cost = calculate_cost(model, response.usage)
llm_cost_total.labels(model=model, team=team, task_type=task_type).inc(cost)
llm_tokens_total.labels(model=model, token_type="prompt").inc(
response.usage.prompt_tokens)
llm_tokens_total.labels(model=model, token_type="completion").inc(
response.usage.completion_tokens)
Best Practices
- Use
gpt-4o-miniorclaude-haikufor 80% of tasks — they're 10–30× cheaper. - Enable prompt caching for system prompts >1,024 tokens (Anthropic) or >1,024 tokens (OpenAI).
- Audit your top 5 prompts by token count — compress or cache them.
- Set hard budget limits with LiteLLM virtual keys before costs spiral.
- Self-host 7B–8B models when monthly API spend exceeds $2k/month.
Related Skills
- llm-gateway - Centralized cost control
- llm-caching - Semantic caching patterns
- vllm-server - Self-hosted inference
- agent-observability - Token and cost telemetry
Signals
- GitHub stars
- 1k
- Forks
- 157
- Last commit
- May 2026
Advanced
- Catalog kind
- skill
- Gateway key
llm-cost-optimization- Source
- github.com/bagelhole/devops-security-agent-skills