How 'Cache Economics' Can Cut Your Small Business AI Bill by 45%

Most small businesses compare AI tools by advertised price per token, but the real cost driver is how vendors handle repeated context — a concept called cache economics. In a typical business prompt of 10,000 tokens, up to 9,000 may be identical across every call, covering system instructions, FAQs, and formatting rules. Vendors that cache this repeated content charge significantly less for those tokens on subsequent calls, with some providers like Anthropic offering cache-read prices up to 90% lower than standard input rates. When Anthropic updated Claude's cache pricing, real-world costs for consistent-context users dropped by roughly 45% despite no change in the headline sticker price. Experts advise small businesses to ask vendors directly about cache pricing, the discount rate on cached tokens, and the expected cache hit ratio before committing to any AI tool or API.