Question 1

How is AI API cost calculated?

Accepted Answer

AI API costs are based on tokens processed. A token is roughly 4 characters or ¾ of a word. You pay separately for input tokens (your prompt) and output tokens (the model's response). Price is quoted per 1 million tokens.

Question 2

What's the difference between input and output tokens?

Accepted Answer

Input tokens are what you send to the model (your prompt, system instructions, context). Output tokens are what the model generates in response. Output tokens are typically 2-6× more expensive than input tokens.

Question 3

What is prompt caching?

Accepted Answer

Prompt caching stores frequently used system prompts and context so they don't need to be reprocessed. Cached input tokens cost ~50% less. This is especially useful for chatbots and RAG applications with consistent system prompts.

Question 4

Which AI model is cheapest?

Accepted Answer

Gemini 2.0 Flash and Flash-Lite offer the lowest per-token cost at $0.10/$0.40 per 1M tokens. GPT-4o Mini is another budget option at $0.15/$0.60. For Anthropic, Claude Haiku 4.5 is the most cost-effective at $1/$5.

Question 5

How many tokens does a typical request use?

Accepted Answer

A chatbot message: ~200-500 input + 100-300 output tokens. A blog post generation: ~200 input + 1,000-2,000 output. Code assistance: ~500-2,000 input + 200-800 output. RAG queries: ~1,000-3,000 input + 200-500 output.

Question 6

How can I reduce AI API costs?

Accepted Answer

Key strategies: (1) Use prompt caching for repeated system prompts, (2) Choose smaller models for simpler tasks, (3) Limit output token length, (4) Batch requests when possible, (5) Use embeddings instead of LLMs for search/classification.

Question 7

Should I use GPT-4o or Claude for my project?

Accepted Answer

GPT-4o is excellent for general-purpose multimodal tasks. Claude Sonnet 4.6 leads on coding benchmarks (SWE-bench) and excels at following complex instructions. For cost-sensitive apps, GPT-4o Mini and Gemini 2.0 Flash are the best budget choices.

Question 8

What is the context window?

Accepted Answer

The context window is the maximum number of tokens a model can process in a single request (input + output combined). Larger context windows let you send more information but may increase costs. Gemini and Claude 4.6 models offer up to 1M tokens.

Question 9

How accurate are these price estimates?

Accepted Answer

These prices reflect published API rates as of March 2026. Actual costs may vary based on: volume discounts, regional pricing, fine-tuned model usage, and provider-specific promotions. Check provider pricing pages for the latest rates.

Question 10

Are there free tiers for AI APIs?

Accepted Answer

Most providers offer free credits for new users: OpenAI ($5-18 credits), Google Cloud ($300 credits), Anthropic (limited free tier for Claude). After free credits, you pay per token used.

Model	$/Request	Monthly	Annual
🟣 Llama 3.1 8BMeta	$0.0001	$2.40	$29
🔵 Gemini 2.0 Flash-LiteGoogleCheapest	$0.0002	$5.10	$61
🔵 Gemini 2.0 FlashGoogleBest Value	$0.0002	$5.10	$61
🟢 GPT-4o MiniOpenAIPopular	$0.0003	$7.65	$92
🔴 Mistral SmallMistral	$0.0003	$8.40	$101
🟣 Llama 3.1 70BMetaOpen Source	$0.0003	$8.85	$106
🔵 Gemini 2.5 FlashGoogle	$0.0009	$27.00	$324
🔴 Mistral MediumMistral	$0.0010	$29.40	$353
🔵 Gemini 3 Flash (Preview)GoogleNew	$0.0012	$34.50	$414
🟠 Claude Haiku 4.5Anthropic	$0.0020	$60.00	$720
🔴 Mistral LargeMistral	$0.0028	$84.00	$1,008
🔵 Gemini 2.5 ProGoogle	$0.0036	$108.75	$1,305
🟢 GPT-4oOpenAIMost Popular	$0.0043	$127.50	$1,530
🔵 Gemini 3 Pro (Preview)GoogleNew	$0.0046	$138.00	$1,656
🟢 o1-miniOpenAIReasoning	$0.0051	$153.00	$1,836
🟠 Claude Sonnet 4.5Anthropic	$0.0060	$180.00	$2,160
🟠 Claude Sonnet 4.6AnthropicBest Coding	$0.0060	$180.00	$2,160
🟠 Claude Opus 4.5Anthropic	$0.01	$300.00	$3,600
🟠 Claude Opus 4.6AnthropicMost Capable	$0.01	$300.00	$3,600
🟢 GPT-4 TurboOpenAIDeprecated	$0.01	$420.00	$5,040
🟢 o1OpenAIReasoning	$0.03	$765.00	$9,180

Model	$/Request	Monthly	Annual
🟣 Llama 3.1 8BMeta	$0.0001	$2.40	$29
🔵 Gemini 2.0 Flash-LiteGoogleCheapest	$0.0002	$5.10	$61
🔵 Gemini 2.0 FlashGoogleBest Value	$0.0002	$5.10	$61
🟢 GPT-4o MiniOpenAIPopular	$0.0003	$7.65	$92
🔴 Mistral SmallMistral	$0.0003	$8.40	$101
🟣 Llama 3.1 70BMetaOpen Source	$0.0003	$8.85	$106
🔵 Gemini 2.5 FlashGoogle	$0.0009	$27.00	$324
🔴 Mistral MediumMistral	$0.0010	$29.40	$353
🔵 Gemini 3 Flash (Preview)GoogleNew	$0.0012	$34.50	$414
🟠 Claude Haiku 4.5Anthropic	$0.0020	$60.00	$720
🔴 Mistral LargeMistral	$0.0028	$84.00	$1,008
🔵 Gemini 2.5 ProGoogle	$0.0036	$108.75	$1,305
🟢 GPT-4oOpenAIMost Popular	$0.0043	$127.50	$1,530
🔵 Gemini 3 Pro (Preview)GoogleNew	$0.0046	$138.00	$1,656
🟢 o1-miniOpenAIReasoning	$0.0051	$153.00	$1,836
🟠 Claude Sonnet 4.5Anthropic	$0.0060	$180.00	$2,160
🟠 Claude Sonnet 4.6AnthropicBest Coding	$0.0060	$180.00	$2,160
🟠 Claude Opus 4.5Anthropic	$0.01	$300.00	$3,600
🟠 Claude Opus 4.6AnthropicMost Capable	$0.01	$300.00	$3,600
🟢 GPT-4 TurboOpenAIDeprecated	$0.01	$420.00	$5,040
🟢 o1OpenAIReasoning	$0.03	$765.00	$9,180

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Cost Breakdown — Llama 3.1 8B

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