What is an LLM?

What is an LLM? - LLM

Before we look into the costs of using the model, let’s take a look at what an LLM actually is.

LLMs are a form of generative AI. This means they are used to produce new content. LLMs are specifically designed to produce text content. The chatbots that have popularised AI technology make use of LLMs. Users can input prompts and questions and receive detailed, accurate responses instantly.

LLMs are trained on existing data, trawling huge volumes of online information to build up a base of knowledge and understanding. The model then uses this information to formulate responses and replies to user questions.

Once data has been ingested, LLMs go through a process called deep learning. They study and analyse the data they have collected to draw up and understand connections between words and concepts.

LLMs can be used for a variety of tools , including for text generation, translation and content analysis.

The Common Costs of LLM Usage

The development and advancement of artificial intelligence (AI) over the past few years has been nothing short of astonishing. AI tools are now in widespread use across a vast range of practices, and the technology is continuing to rapidly improve.

One of the most popular AI models in use today is the large language model (LLM). While LLMs are incredibly powerful, their use does come with certain costs. Read on to find out more.

What are the Costs of Using LLMs?

For a business to succeed in today’s world, it must be ready and prepared to adopt new technologies. AI is quickly becoming a must-have for businesses; it can be used to streamline operations and optimise customer relationships and communications.

However, there are also LLM costs that businesses need to think about. The technology used to power these tools is highly advanced, so naturally it often comes with a hefty price tag.

First and foremost, developing and training an LLM is a costly and time-consuming process. It requires a team of skilled engineers and sophisticated equipment.

Once the model is built, training it on data is another expensive step. It’s paramount this is done thoroughly, as using unreliable data can introduce errors and biases into the system.

LLMs must also be regularly maintained to ensure they are working correctly. This requires a fully-staffed team of experts; another expense businesses must contend with.

How can Spending Be Reduced?

LLM costs can be assessed by breaking them down into a token system, with token values attributed to inputs and outputs, creating a clear picture of the cost structures.

One of the most effective ways of bringing LLM spending under control is by using a cost-tracking tool. These tools can be used to segment spending and customise token systems to suit your particular business.

These tools can also perform detailed spending analysis, identifying spikes and tracking their origins to ensure you are not spending more than you can afford.


We’re seeing LLMs used more and more across various businesses and industries. However, businesses must be aware of the costs of using such tools and should consider approaches for reducing spending when making use of LLMs.

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