๐Ÿš Routing saves 30โ€“60% on AI cost when done well

PM LLM Routing
(2026 Edition)

PM LLM routing is the practice of directing each request to the cheapest model that still meets quality and latency bars โ€” tiering by complexity, routing by latency budget, routing sensitive tasks to vetted models, spreading load across vendors, and caching before routing. Done well, it cuts model spend 30โ€“60% without a quality hit.

By Naman Goyal ยท Product manager ยท Builder of PM Streak ยท Updated July 3, 2026

5 routing strategies and 4 pitfalls.

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5 Strategies

1.

Tier by complexity โ€” small/medium/large model per task

2.

Route by latency budget โ€” fast models for inline, slow for async

3.

Route by safety โ€” sensitive tasks to vetted models

4.

Use multiple vendors for resilience

5.

Cache aggressively before routing

4 Pitfalls

โŒ

Routing based on cost alone โ€” quality regressions show up later

โŒ

No A/B testing of routing decisions

โŒ

Routing logic that's a black box no one understands

โŒ

Vendor lock-in through tightly-coupled tooling

FAQ

Is model routing worth the engineering complexity?

For products with material AI cost, yes. Routing typically saves 30โ€“60% on model spend without quality regression. The engineering investment pays back fast at scale. For small or experimental products, default to one good model and optimise later.

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