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Equation 18 · AI Inference Economics in Practice: An Advanced Technical Guide

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u∗u^*

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u∗u^*

Symbol u^*

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is cleared. Utilization above u∗u^* favours reservation; below it favours paying as you go. The formula’s value is what it forces a team to measure honestly before signing: not peak throughput or a favourable week’s average, but utilization sustained across the full commitment term including the slow periods — capacity sized to a launch-week peak and left running at a quarter of that traffic for the following eleven months has pre-paid idle time at the reserved rate.

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