Why Smarter AI Routing Is the Cost Advantage Nobody Is Talking About

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Originally from youtube.com
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Summary

Eric Glyman (CEO of Ramp) frames the AI cost curve as bifurcated: basic AI tasks are 700x cheaper while frontier tasks are 300x more expensive. The arbitrage is smart token routing, sending low-complexity work to cheap models and only escalating to frontier models when needed. Enterprises are already asking vendors for help with “token optimization”.

Key Insight

  • The cost gap between basic and frontier model tiers is widening, not closing. Using GPT-4-class for trivial tasks is a 700x overpay.
  • “Token routing” is becoming a discrete product/skill category, large enterprises are reaching out to peers in CEO chats asking for help.
  • The framing “I don’t need the best intelligence to clean a toilet” is a useful mental model for client conversations: most agentic workflows have 80% janitor steps and 20% brain steps.
  • Implication: building anything LLM-powered today without a router layer leaves margin on the table.