AI

    Inference

    The process of using a trained AI model to make predictions or generate outputs on new data.

    Share

    Key Takeaways

    • Inference is where AI costs accumulate: a single training run is a one-time expense, but inference runs continuously in production.
    • Quantization (reducing precision from 32-bit to 4-bit) can make models 4-8x faster with minimal quality loss.
    • API-based inference (OpenAI, Anthropic) is simplest; self-hosted inference is cheaper at scale but requires GPU infrastructure.

    Optimizing Inference Cost and Speed

    For production AI, inference optimization directly impacts user experience and profitability:

    • Model selection: Use the smallest model that meets quality requirements. GPT-3.5 is 10x cheaper than GPT-4 and sufficient for many tasks.
    • Caching: Store responses for identical or similar queries. Semantic caching can reuse results for paraphrased questions.
    • Streaming: Return tokens as they are generated rather than waiting for the complete response. Improves perceived latency.
    • Batching: Process multiple requests simultaneously on the same GPU. Increases throughput by 2-4x.
    Cost Optimization

    Route simple queries to smaller, cheaper models (GPT-3.5, Haiku) and complex queries to powerful models (GPT-4, Opus). This hybrid approach can reduce costs by 60-80% while maintaining quality where it matters.

    Frequently Asked Questions

    Need Help With Implementation?

    Our team specializes in implementing the solutions described in this glossary.

    Get in Touch