How to Reduce AI Agent Inference Costs by 100x
By NeoSmith AI Research Team. March 15, 2026. 13 min read.
Three strategies that compound to deliver 10x to 100x cost reduction: SLM distillation, semantic routing, and production optimization.
Key Takeaways
- SLM distillation alone delivers 10-15x cost reduction
- Semantic routing adds another 2-5x through intelligent model selection
- Production optimizations (context compression, caching) compound to 80-100x total