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Economics

The Economics of Intelligence

Why using a Reasoning Model for everything is financial malpractice.

The most advanced "Reasoning Models" (like the "o-series") are engineering marvels. They are also incredibly expensive. Using them for simple summarization or extraction is like commuting to work in a main battle tank.

The Challenge: "One Size Fits All" thinking.

Many teams hardcode their application to use the single "Smartest" model available. This leads to bloated cloud bills and unnecessary latency for simple tasks.

Recommendation: Model Cascades (Routing).

Implement a Smart Router. An inexpensive classifier sees the user request first:

This approach, known as "Token Arbitrage," allows you to maintain high quality on difficult tasks while slashing the cost of the other 80% of traffic.