Microeconomic S

Here are some of the microeconomic considerations for creating an AI Chabot:
1. Cost structure: The major costs for an AI Chabot would be:
- Development costs: This includes costs for building the NLP models, conversational models, integration with enterprise
systems, etc. These are typically high upfront costs.
- Hosting and infrastructure costs: The Chabot would require servers and infrastructure to host the models and handle
customer queries. These are recurring costs that scale with usage.
- Licensing fees: If using a third-party AI platform like OpenAI or Anthropic, there would be fees for using their models and
APIs. These are also recurring costs that scale with usage.
2. Pricing model: Given the cost structure, a usage-based pricing model that charges per query or message would be
suitable. This passes on the variable costs to customers and also incentivizes the Chabot creator to build an effective
solution. OpenAI and other platforms also use a pay-as-you-go pricing model based on tokens (roughly equivalent to words)
or minutes of usage.
3. Managing demand: With a usage-based model, the key is to balance supply and demand. Having too much demand that
outpaces the infrastructure capacity would reduce quality of service. Options to manage high demand include:
- Rationing access by capping monthly queries for customers
- Increasing prices during peak demand periods
- Scaling infrastructure to handle higher loads (but this also increases costs)
4. Differentiation: There are many existing Chabot and virtual assistant solutions. To stand out, the Chabot would need to
demonstrate key differentiators like:
- Deeper enterprise integration and domain expertise
- More advanced NLP that can handle complex queries
- Personalization based on customer data
- Ongoing improvements to models and knowledge bases
- Superior customer service and support
Those are some of the key microeconomic considerations I would outline for creating an enterprise AI Chabot with a cost-
per-message pricing model. Please let me know if you have any other questions!
For every request (tokens):
Input query + history context + rag data + sys prompt = 20 + 1500 + 1000 + 300 = ~2800
Output tokens: 400.
In total, ~3200 tokens per request.
So for 30 devs at 10 prompts per day total tokens = 3200 * 30 * 10
= 960000 tokens per day.
Forgot 3.5 turbo
0.007 * 960000/1000 = ~7$ per day
First, let's break down the components of a request:
1. Input query (20 tokens): this is the actual question or command that you're asking the AI. For example, "What's the
weather like today?" or "Translate this text to French." Each word or piece of punctuation is considered a token.
2. History context (1500 tokens): this is the conversation history that the AI uses to understand the context of the current
query. For example, if you asked "What's the weather like today?" and then followed up with "And tomorrow?” the AI
would use the history context to understand that the second question is also about the weather.
3. Rag data (1000 tokens): this is additional data that the AI uses to generate its response. It could be anything from a
database of information to a list of user preferences.
4. Sys prompt (300 tokens): This is a system-generated prompt that helps guide the AI's response. For example, it might
instruct the AI to provide a detailed answer or to use a certain tone of voice.
When you add up all these components, you get a total of 2800 tokens for the input part of the request.
The AI's response is also measured in tokens. In this case, the output is 400 tokens, bringing the total for the entire request
to 3200 tokens.
Now, let's say you have 30 developers, each making 10 prompts per day. That's a total of 300 prompts per day. If each
prompt results in a request of 3200 tokens, then the total number of tokens used per day is 3200 * 300 = 960,000 tokens.
The cost of using the GPT-3.5 Turbo model is $0.007 per 1,000 tokens. So, to calculate the cost per day, you would divide
the total number of tokens by 1,000 (to get the number in thousands), and then multiply by the cost per thousand tokens:
0.007 * (960,000 / 1,000) = $6.72 per day
So, for 30 developers making 10 prompts each per day, the cost would be approximately $6.72 per day. Please note that
this is a rough estimate and the actual cost may vary depending on the exact number of tokens used.
Sure, let's break down the current calculation first:
1. Each request consists of an input query (20 tokens), history context (1500 tokens), rag data (1000 tokens), and system
prompt (300 tokens). This totals to 2800 tokens per request.
2. The output from the AI is 400 tokens. So, the total tokens used per request is 2800 (input) + 400 (output) = 3200 tokens.
3. If you have 30 developers each making 10 prompts per day, the total tokens used per day is 3200 tokens/request * 30
devs * 10 prompts/dev = 960,000 tokens.
4. The cost for GPT-3.5 Turbo is $0.007 per 1000 tokens. So, the cost per day is 0.007 * 960,000/1000 = $6.72.
Now, let's consider additional costs such as vector database costs and cloud hosting costs.
Vector Database Costs:
Let's assume you're using a service like Pinecone, which charges per minute for the time your index is live. The cost can vary
depending on the cloud provider, pod type, and number of pods. For simplicity, let's assume a cost of $0.0960/hour.
Cloud Hosting Costs:
Cloud hosting costs can vary greatly depending on the provider (AWS, Google Cloud, Azure, etc.), the region, the instance
type, and the usage. For simplicity, let's assume a cost of $0.10/hour.
New Formula:
Total Cost = AI Cost + Vector Database Cost + Cloud Hosting Cost
AI Cost = (Number of Tokens/1000) * Cost per 1000 Tokens
Vector Database Cost = Number of Hours * Cost per Hour
Cloud Hosting Cost = Number of Hours * Cost per Hour
Total Cost = ((Number of Tokens/1000) * Cost per 1000 Tokens) + (Number of Hours * Vector Database Cost per Hour) +
(Number of Hours * Cloud Hosting Cost per Hour)
Example:
Let's assume the vector database and cloud hosting are live for 10 hours a day.
Total Cost = ((960,000/1000) * 0.007) + (10 * 0.0960) + (10 * 0.10)
Total Cost = $6.72 (AI Cost) + $0.96 (Vector Database Cost) + $1.00 (Cloud Hosting Cost)
Total Cost = $8.68 per day
Please note that these are simplified calculations and actual costs can vary based on various factors.

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Here are some of the microeconomic considerations for creating an AI Chabot:

1. Cost structure: The major costs for an AI Chabot would be:

- Rationing access by capping monthly queries for customers

- Increasing prices during peak demand periods

- Deeper enterprise integration and domain expertise

- More advanced NLP that can handle complex queries

- Personalization based on customer data

- Ongoing improvements to models and knowledge bases

- Superior customer service and support

Output tokens: 400.

In total, ~3200 tokens per request.

So for 30 devs at 10 prompts per day total tokens = 3200 * 30 * 10

= 960000 tokens per day.

Forgot 3.5 turbo

0.007 * 960000/1000 = ~7$ per day

First, let's break down the components of a request:

0.007 * (960,000 / 1,000) = $6.72 per day

Vector Database Costs:

Cloud Hosting Costs:

Total Cost = AI Cost + Vector Database Cost + Cloud Hosting Cost

AI Cost = (Number of Tokens/1000) * Cost per 1000 Tokens

Vector Database Cost = Number of Hours * Cost per Hour

Cloud Hosting Cost = Number of Hours * Cost per Hour

Total Cost = ((960,000/1000) * 0.007) + (10 * 0.0960) + (10 * 0.10)

Total Cost = $8.68 per day

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