Summary: Training is expensive, but inference (actually serving models) is where most cost now lives, and where most companies work: few train, everyone serves. A model’s memory need is roughly parameters × bits per parameter. Frontier open models now reach 1T+ parameters, so they’re split across GPUs and even across 8-GPU machines (tensor parallelism), small ones are replicated (data parallelism), and mixture-of-experts models route each token to a few experts that must be placed across GPUs. The KV cache, which trades memory for recomputation, can reach terabytes with long contexts and many users, so it’s managed in a hierarchy (GPU → host DRAM → SSD) and shared across users for common prefixes like system prompts. The job reduces to one number: minimize $ per million tokens while meeting a latency SLA (e.g. time to first token). Price comes down to utilization, and a rich, fast-growing framework stack (vLLM, SGLang, Mooncake, LMCache, llm-d) is itself an optimization dimension.

Key ideas

Disagreements & open questions

Takeaways

model-selection · open-weight-models · ai-infrastructure · llm-cost-optimization · small-language-models · future-of-software-engineering