Towards Data Science

We Built a Routing Layer to Cut Our AI Costs. It Broke the Product.

A team cut their AI inference bill by more than half. Three months later, customer satisfaction was dropping and the cost savings were tied to the quality loss.

Towards Data Science
May 29

RAG Is Burning Money — I Built a Cost Control Layer to Fix It

Most RAG systems are optimized for answer quality, not cost—and that blind spot gets expensive fast. In this article, I break down a production-ready cost control layer combining semantic caching, query routing, token budgeting, and circuit breaking, achieving an 85% reduction in LLM costs without sacrificing answer quality.

By Emmimal P Alexander