Originally published on AI Tech Connect.
What compression actually buys you Input tokens are charged on every call and prefilled on every call. The second half is the one teams under-weight. The bill turns up in a monthly invoice and someone eventually notices it; the latency is invisible in aggregate and extremely visible to the person watching a spinner. On a request with a long context and a short answer — most retrieval-augmented question answering, most classification, most support triage — the dominant contributor to time-to-first-token is prefilling your input. Halve the input and you take a real bite out of perceived responsiveness as well as cost. Compression sits alongside two other levers, and the three are genuinely orthogonal. Caching helps when the same prefix is seen again: it does nothing at all for a call whose…
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