Originally published on AI Tech Connect.
What you need to know Most production LLM bills contain a large amount of the same tokens, sent over and over. A support classifier re-sends its 6,000-token policy and schema on every ticket. A retrieval-augmented answer bot re-sends the same instructions and the same retrieved passages for a burst of follow-up questions. A coding agent re-sends the same tool definitions and the same repository context on every turn. In each case the provider reprocesses that identical prefix from scratch and charges you full input price for it — again and again. Prompt caching removes that waste. The provider stores the processed form of your stable prefix and, on the next request that starts with the same bytes, reuses it and bills the reused portion at a steep discount. As of July 2026, that discount…
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