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LLM cost engineeringField notes 2026.09
Engineers at drafting tables and test benches on a desert airfield in daylight, a delta-wing jet behind them

Against any foundation model

Accuracy up. Token cost down. Latency down.

Your models work around the clock.

So they better be optimal.

Most teams pay for tokens the model never needed. We find them, measure the removal, and keep the accuracy.

How

Four levers, in that order.

We tune the system around the model in four places: what goes in, what each call costs, how many calls the loop makes, and what model runs. Baseline first, one lever at a time.

01up to 93% fewer tokens

Context: only what the call needs

Retrieval, reranking, sparse reading, and compaction that keeps the cache warm. Reading is the biggest line item: observations are 60 to 80% of agent tokens, and only 6 to 15% of what gets read is used.

Read less, solve more ->
0258% cut over 8 live weeks

Cache and route every call

Stable prefixes at a tenth of the input price, batch tiers at half, a cheap model first with escalation on low confidence, and a cache for repeat questions.

Closed-loop routing ->
03cost per successful task

Tight loops, scored per task

Every loop runs against our open evaluation framework: accuracy, p95 latency, and cost per successful task. Prompt wording alone moves reasoning tokens 2.4 to 7.4x with no gain in success.

Evaluation framework on GitHub ->
04770M beat 540B

The model itself, when the eval says so

Distill, fine-tune, quantize, or draft-and-verify. A 770M model trained on a frontier model’s rationales beat a 540B model in the original study.

Distilling step-by-step ->

Ab initio

When no foundation model fits, we build one.

Data, architecture, training loop, evaluation, and serving, written at the level where the cost is decided. We have worked at that depth since the first transformer paper: speech systems that informed early Whisper, and a scientific question-answering layer for NASA Space Biology.

Partner rates

Discounts on the tokens themselves.

As a select OpenAI partner, we can provide token-usage discounts for specific cases. Our Anthropic partnership is en route.

Who

Veterans of production. Pioneers of the imminent future.

We built speech systems that informed early Whisper, published on language-model products a year and a half before ChatGPT, and ship for NASA, DARPA, and Boeing.

Our write-up 1.5 years before ChatGPT ->
A rocket climbing out of a wild summer meadow

Welcome to the weeds.

  1. 01Lever 01

    Contextual retrieval and reranking

    Fewer, better chunks in context.

    −67% retrieval failures

  2. 02Lever 01

    Sparse reading

    Preview, then read only the evidence the step needs.

    Up to 92.9% fewer tokens

  3. 03Lever 01

    Prompt compression

    A small model deletes low-information tokens before the call.

    2–5x compression

  4. 04Lever 01

    Compaction that keeps the cache

    Drop stale tool output and old turns without breaking the prefix.

    61–87% lower cost on long sessions

  5. 05Lever 02

    Prompt caching

    Mark the stable prefix, or let the provider match it.

    Cached input at 0.1x

  6. 06Lever 02

    Cache-aware agent loops

    Cache system prompt and tools. Keep volatile output after the breakpoint.

    41–80% cost cut on long runs

  7. 07Lever 02

    Batch and flex tiers

    Queue what can wait an hour. Slow synchronous calls at the same rate.

    50% off

  8. 08Lever 02

    Routing, cascades, semantic cache

    Cheap model or cached answer first. Escalate on low confidence.

    58% live, up to 98% in benchmarks

  9. 09Lever 03

    Effort and reasoning controls

    Set thinking per call. Stop paying for max everywhere.

    Low to max, per request

  10. 10Lever 03

    Prompt and harness discipline

    “Try multiple approaches” multiplies reasoning tokens. Harness choice moves cost per success 5 to 30x.

    2.4–7.4x reasoning tokens, no gain

  11. 11Lever 03

    Structured outputs

    Schema-bound answers. No prose padding.

    JSON schema enforced

  12. 12Lever 03

    Cost per successful task

    The metric the loop is tuned against. Tokens and cache hits are consequences.

    accuracy · p95 · cost

  13. 13Lever 04

    Distillation

    Train a small model on the big model’s rationales. Target the failures that escalate.

    2x the cut of random distillation

  14. 14Lever 04

    Fine-tuning on your ground truth

    The smaller model learns your schema, your tone, your edge cases.

    Held to the same eval

  15. 15Lever 04

    Quantization and prefix cache

    Self-hosted: activation-aware 4-bit weights, prefix reuse in the serving layer.

    >3x speedup vs FP16

  16. 16Lever 04

    Speculative decoding

    A draft model guesses. The big model verifies in parallel. Now batched for agents.

    2–3x faster

Six of these usually apply to a given stack. Which six depends on your traffic.

Find your six
The same airfield at dusk, an engine test stand glowing, engineers still at the drafting table

Results, before any partner discount

18%to93%

token cost saved across client engagements.

Almost every client has room to save money and improve accuracy and/or p95 latency. The baseline tells us which, in about a week.

Short answers

Token cost FAQ

How much can LLM token costs be reduced?

Our client engagements saved 18% to 93% of token cost before any partner discount. The range depends on how much of each prompt is stable, how many agent turns repeat context, and whether a smaller model holds accuracy on the ground-truth set.

Does reducing tokens reduce accuracy?

Usually the opposite. Tight retrieval and shorter loops remove noise from the context. Every change runs against the evaluation framework, so accuracy, p95 latency, and cost per task are measured before and after it ships.

What is the fastest first win?

Prompt caching. Cached reads cost a tenth of fresh input at Anthropic and up to 90% less at OpenAI. Batch processing takes another 50% off work that can wait an hour. Partner token discounts apply on top for qualifying cases.