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Prompt Caching and Semantic Caching

Two different caches solve two different bills. Prompt caching reuses the model's internal computation over a stable prefix, cutting cost and time-to-first-token on every call that shares it. Semantic caching skips the model entirely when a near-identical question has been answered before, and it is the one that can serve a wrong answer confidently.

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RELATED CONCEPTS

KV Cache AI Cost and Unit Economics Latency Optimization Model Routing and Cascades Embeddings & Vector Representations

LESSONS THAT TEACH THIS

The FDE EngagementCost per unit of their work is the number, and it decides the architecture25 min→Hard DeploymentsServe it from cache, send less, or send it somewhere cheaper30 min→

PRACTICE THIS IN REAL QUESTIONS

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