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How does prompt caching work, and when does it actually pay off?

The KV-cache mechanics behind the discount, the prefix rule that silently breaks caching for most teams, and the workloads where caching cuts bills 50-90% versus the ones where it does nothing.

Updated Sep 2026 · Grounded in real Forward Deployed Engineer interview loops and written to a senior-engineer editorial bar.

The KV-cache mechanics behind the discount, the prefix rule that silently breaks caching for most teams, and the workloads where caching cuts bills 50-90% versus the ones where it does nothing.

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