Coinbase: Has reduced AI spending by nearly 50% and is trying to default to adopting open weight models

Coinbase CEO Brian Armstrong published an article introducing the company's latest progress in AI cost optimization.

Armstrong stated that as the usage of AI and Token consumption continues to grow, the key to controlling costs is not to restrict employee usage or frequently send budget reminders, but to optimize default model selection, task routing mechanisms, and caching strategies.

He revealed that Coinbase is trying to use open-weight models such as GLM 5.2 and Kimi 2.7 as default options through an internal LLM gateway, while still allowing engineers to choose other models based on specific task requirements. Data shows that 91% of the company's employees have never reached the AI usage quota limit, so Coinbase has not chosen to tighten quotas but instead improved overall efficiency through lower-cost model solutions.

In terms of model routing, Coinbase preprocesses prompts and, combined with cache hit rates and the pricing of different models, automatically assigns tasks to the most suitable model. Armstrong believes that complex tasks such as planning and reasoning may require support from cutting-edge models, but execution tasks do not necessarily need to invoke higher-cost models. In the future, the model selection process should be more automated by AI rather than relying on manual decisions.

Additionally, he pointed out that cache hit rate is one of the important factors affecting AI costs. Coinbase has incorporated a cache-aware mechanism into the request process to improve the reuse rate of historical results. For example, in the case of LibreChat, after optimizing the caching solution, its cache hit rate has increased from 5% to 60%.

Armstrong also stated that the company requires engineers to keep context as concise as possible, including starting new sessions when switching tasks, narrowing the context scope of files, and closing unused tools, to reduce unnecessary Token consumption.

According to him, through these measures, Coinbase has successfully reduced AI spending by nearly 50%, while Token usage continues to grow.