May 07, 2026
Prompt Caching is one of the most important cost-saving features introduced by AI providers like Anthropic and DeepSeek. It allows the model to "remember" the beginning of your prompt.
If you have a 10,000-word knowledge base or a long system instruction that stays the same across every user request, you can cache it. Instead of paying to process those 10,000 words every time, you only pay a tiny fraction for the "cache hit," often reducing costs by 90% for high-context apps.
Beyond cost, caching significantly improves speed. Because the model doesn't have to re-read the cached part of the prompt, the response starts almost instantly. This is a game-changer for RAG systems and coding assistants where the "background context" is large but stays mostly the same.