TL;DR: GPT-4o-mini costs 94% less than GPT-4o per token. Teams using CostLayer’s model swap recommendations typically save 30–50% on their monthly AI API bill.
The Model Overspend Problem
GPT-4o costs $2.50 per 1M input tokens and $10.00 per 1M output tokens. GPT-4o-mini costs $0.15 and $0.60 respectively — that’s a 94% reduction. Yet most teams route all traffic through GPT-4o because it’s the default and “just works.”
The result? Engineering teams overspend by 30–50% on AI API costs every month. Use our OpenAI Calculator to see exactly how much you could save.
How Much Does GPT-4o Cost Per Token?
| Model | Input (per 1M tokens) | Output (per 1M tokens) |
|---|---|---|
| GPT-4o | $2.50 | $10.00 |
| GPT-4o-mini | $0.15 | $0.60 |
| GPT-4-turbo | $10.00 | $30.00 |
Identifying Swap Candidates
Not every API call needs the most powerful model. Three categories of tasks are prime swap candidates:
- Classification and labelling — sentiment analysis, content moderation, intent detection
- Data extraction — parsing structured data from unstructured text, entity recognition
- Summarisation — condensing documents, generating abstracts, creating TL;DRs
These tasks typically achieve 95%+ accuracy with smaller, cheaper models.
The 95% Quality Rule
CostLayer analyses your API usage and identifies calls where a cheaper model produces output that’s at least 95% as good as the expensive model. This threshold ensures quality remains high while costs drop significantly.
Expected Savings
Teams using CostLayer’s model swap recommendations typically see 30–50% reduction in their monthly AI API bill. For a team spending $5,000/month on AI APIs, that’s $1,500–$2,500 in monthly savings.
Key Takeaways
- GPT-4o-mini is 94% cheaper than GPT-4o per token
- Classification, extraction, and summarisation tasks are prime swap candidates
- The 95% quality rule ensures swaps don’t degrade output
- Expected savings: 30–50% of monthly AI API spend
Track your AI API costs in real-time → Get started with CostLayer