The answer
Because every new message requires sending the entire conversational history back to the model, meaning you pay for historical tokens repeatedly.
How to Manage LLM API Costs and Token Usage in Production
Why does chat history increase costs?
More FAQs in How to Manage LLM API Costs and Token Usage in Production
Caching responses based on the similarity of query embeddings, rather than exact string matches, to return cached data for slightly rephrased questions.
No, streaming tokens in chunks costs the exact same as receiving the full response at once.
Using algorithms or LLMs to remove non-essential words from a prompt before feeding it into the main model to reduce tokens.
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