Equation 10 · Part 2 · Comparing the Main Approaches to AI Inference Economics

Symbol u

P_r < u \cdot P_d, \qquad \text{i.e.} \qquad u > \frac{P_r}{P_d} \equiv u^{*}.

u

What this part means

u is a part of this expression. Its role is fixed by the surrounding article and by the operations shown in the formula.

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u is a part of this expression. Its role is fixed by the surrounding article and by the operations shown in the formula.

Full expressionSymbol uArticle meaning

The passage around this formula

…accelerator-hour, and let the on-demand or serverless rate that would otherwise serve the same throughput cost $P_d$ per accelerator-hour at full utilization. If the buyer’s realized utilization of the reserved capacity is u $\in$ (0, 1] , the reserved option is cheaper exactly when $P_r < u \cdot P_d, \qquad \text{i.e.} \qquad u > \frac{P_r}{P_d} \equiv u^{*}$ . Below the break-even utilization $u^{*}$ , paying on demand only for the hours actually used is cheaper than holding a reservation that sits partly idle; above it, the reservation wins. What no published rate card can…

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