Skip to content
Essay · Value and proof

Caching, Batch and Committed Capacity: The Buying Levers on an AI Bill, and How to Report Them in FOCUS

After model choice, three levers set most of an AI token bill: prompt caching, batch processing and committed capacity. How each works, when commitment pays, and how to map AI charges to FOCUS 1.4 columns until FOCUS 1.5 adds token fields.

Published Updated 6 min read

Once a team has chosen a model, three buying decisions set most of what it pays per token: whether repeated context is cached, whether work that can wait is sent as a batch, and whether steady demand is bought as committed capacity rather than per request. They are worth taking in that order, because each one asks for more commitment than the last.

The second half of this piece covers reporting. AI charges are arriving in FinOps data now, before the FOCUS specification has dedicated token columns. A consistent mapping to the current columns avoids rebuilding reports later.

Three columns in order of increasing commitment: prompt caching, batch processing and committed capacity, each with what changes, what you gain and what to watch.
Take the levers in order. Each asks for more commitment than the one before.
Three columns in order of increasing commitment: prompt caching, batch processing and committed capacity, each with what changes, what you gain and what to watch.

Take the levers in order. Each asks for more commitment than the one before.

Lever one: prompt caching

Most production prompts repeat a large block of context: system instructions, a policy document, a long conversation history. Caching stores that block so later requests read it at a discount instead of paying for it again.

Caching needs no commitment and usually no change to how the application behaves, so it comes first. Its value depends on how much of each prompt is repeated and how often the cache is hit before it expires. A cache that is written and rarely read costs more than no cache at all.

Lever two: batch processing

Work that does not need an answer in seconds, such as overnight classification, document backlogs, evaluations and report generation, can be sent as a batch.

The work here is in the application, not the contract: separating requests that can wait from those that cannot. For many back-office workloads that split is large, and the discount applies to every token in it.

Lever three: committed capacity

Each major cloud sells model capacity by the hour rather than by the token:

OfferUnitTermsBilling
Microsoft Foundry provisioned throughputProvisioned throughput units (PTUs)Hourly, or an Azure Reservation for one month or one yearBilled for deployed PTUs whether or not they are used
Amazon Bedrock Provisioned ThroughputModel unitsNo commitment, one month or six months; longer terms cost less per hourHourly, until the capacity is deleted
Google Vertex AI Provisioned ThroughputGenerative AI scale units (GSUs)One week, one month, three months or one yearFixed-term subscription

Microsoft's documentation makes two points that apply to all three. A reservation is a billing discount, not a guarantee of capacity, so deployments should be created first and reserved afterwards. And capacity bought for peak demand is paid for at the trough.

Commitments also tie the buyer to a supplier's balance sheet for the term. That matters more for specialist GPU providers than for the major clouds: Gartner expects more than 80% of neocloud providers to stop operating independently by 2030 (Gartner, 14 October 2026). See What a Supplier Write-Down Cycle Means for AI Buyers. At the major clouds the near-term issue is scarcity rather than failure: with AWS capacity reportedly largely sold out into 2027, committed discounts may be harder to win, and because a reservation is a discount rather than a guarantee, buyers should confirm the capacity exists before they commit. The article's update of 5 November 2026 sets out the evidence and its limits.

When commitment pays

The test is utilisation. Compare the committed price per hour with what the same capacity would cost per hour at pay-as-you-go prices if it were fully used:

Break-even utilisation = committed cost per hour
                         ÷ pay-as-you-go cost of the capacity at full use, per hour
Hourly utilisation over a day for an illustrative workload, 10% overnight rising to 90% at midday and averaging 35%, against a 60% break-even line. The 10% floor the workload never drops below is shaded as the part worth committing.
Invented figures. Committing for the peak pays £60 an hour for use worth £35. Committing for the floor pays £6 an hour for use worth £10.
Hourly utilisation over a day for an illustrative workload, 10% overnight rising to 90% at midday and averaging 35%, against a 60% break-even line. The 10% floor the workload never drops below is shaded as the part worth committing.

Invented figures. Committing for the peak pays £60 an hour for use worth £35. Committing for the floor pays £6 an hour for use worth £10.

Reporting AI charges in FOCUS

FOCUS 1.4, ratified on 4 June 2026, has no column for token type or model identity. The FinOps Foundation says FOCUS 1.5 is scoped to add model identity and input and output token consumption. Until then, AI charges can be carried in existing columns. The mapping below is a working convention, not part of the specification.

What the AI bill showsFOCUS 1.4 columnNotes
Model and token type (input, output, cached, batch)SkuId, SkuMeter, ChargeDescriptionKeep one row per model and token type. Batch and cached tokens usually appear as their own price lines rather than as a discount
Number of tokensConsumedQuantity, ConsumedUnitUse one unit name, such as Tokens, across providers
Billing unitPricingQuantity, PricingUnitOften per million tokens; keep it distinct from the consumed unit
Who provides the model serviceServiceProviderNameThe spec's marketplace and reseller rules decide this for models bought through a cloud platform. Record the decision and apply it consistently
Whose infrastructure runs itHostProviderNameMust match the service provider unless the host is chosen by the customer or exposed by the provider
Who sends the invoiceInvoiceIssuerNameCan differ from both of the above
CategoryServiceCategory, ServiceSubcategoryAI and Machine Learning, with Generative AI as the subcategory for model usage
Project, workspace or API keySubAccountId, ResourceId, TagsThe allocation key. Without it, AI spend cannot be shown back to the teams that use it
Reservation or capacity purchaseChargeCategory (Purchase), CommitmentDiscountId or CapacityReservationIdShow the purchase once, and the usage it covers against it
What the organisation actually paysBilledCost, EffectiveCostEffective cost spreads commitment purchases over the usage they cover, so unit costs stay comparable
Seven lines of an AI bill mapped to FOCUS 1.4 columns, from model and token type to SkuId and SkuMeter, through the project or API key as the allocation key, to BilledCost and EffectiveCost.
The mapping in the table above at a glance. A working convention, not part of the specification.
Seven lines of an AI bill mapped to FOCUS 1.4 columns, from model and token type to SkuId and SkuMeter, through the project or API key as the allocation key, to BilledCost and EffectiveCost.

The mapping in the table above at a glance. A working convention, not part of the specification.

Where a provider does not publish a FOCUS export, the usage and cost APIs listed in the billing APIs reference can be converted with the same mapping. When FOCUS 1.5 is ratified, the model and token-type fields above move into their dedicated columns, and the rest of the mapping should stand.

What would change this view

  • If providers move to outcome-based or blended pricing, token-level levers matter less and the mapping above needs a different unit.
  • If committed capacity becomes portable across model generations, as Microsoft's model-independent reservations already are within a deployment type, the risk of committing falls and the break-even utilisation matters less.

Sources

Topics
  • FinOps
  • Inference
  • FOCUS
  • Cost management

By Ed Epstein, who works at IBM. The postings on this site are my own and don't necessarily represent IBM's positions, strategies or opinions. About and disclosure · Methodology