AI API Costs Are Your Biggest Variable Expense If you are building with AI in 2026, API costs are probably your largest and fastest-growing expense. Here are five strategies that cut costs by 50% or more without changing a single line of application code. Strategy 1: Smart Model Routing Not every request needs GPT-5.2. A simple summarization can use DeepSeek V3 at 1/10th the cost. Smart routing sends each request to the cheapest model that meets your quality threshold. Example: 10,000 requests per day All to GPT-5.2: $75/day Smart routing: $32/day Savings: 57% Strategy 2: Token Optimization Trim your system prompts. Many developers send 500+ token system prompts for every request. Optimize to 100 tokens and save 80% on input costs. Also use max_tokens wisely. If you need a 100-word answer, set max_tokens to 200, not 4096. Strategy 3: Caching If you ask the same question twice, cache the answer. Semantic caching finds similar (not just identical) queries and returns cached results.…