Glossary · AI
What is
Total Cost of Ownership (TCO)?
The full cost of running an AI feature in production — inference, eval, observability, ops, and people.
By Anish· Founder · Vedwix
·Definition
TCO for an AI feature includes more than the API bill. Real costs: inference (per call), evals (continuous), observability tooling, platform engineers, and the cost of regressions. A feature that costs $500/month in API calls might cost $5k/month in TCO. Pricing should reflect this.
Example
A RAG chatbot costs $300/month in OpenAI fees but $4k/month in TCO including eval cycles, monitoring, and support.
How Vedwix uses Total Cost of Ownership (TCO) in client work
We model TCO before recommending architecture. Cheap inference can mean expensive operations.
Building with Total Cost of Ownership (TCO)?
We ship this.
If you're building with Total Cost of Ownership (TCO) in production, we can help — from architecture review to full implementation.
Brief us