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Smarter Model Cost Paradox
Counter-intuitively, using more expensive, smarter AI models often costs less overall because they require fewer iterations and use fewer total tokens
Decision Rule
Always start with the smartest available model, even if per-token cost is higher
How It Works
Smarter models get things right on first try, reducing back-and-forth iterations that consume tokens exponentially
Failure Modes
Optimizing for per-token cost rather than total cost
Using cheaper models for complex tasks requiring multiple attempts
Not factoring in time and opportunity cost of iterations
Example Decision
“Choose Opus 4.5 over Sonnet for coding tasks because despite 3x higher per-token cost, it typically uses 5x fewer tokens due to accuracy”