Applied Wizardry: Cutting AI coding token costs, with Dave Slutzkin

**Follow Applied Wizardry on its new feed to keep getting every episode.** Dave Slutzkin, co-founder of Antiburn, joins Yaniv to break down what actually drives token costs in agentic development and how to bring them down. They cover how caching differs between Anthropic and OpenAI, when to reach for which model and thinking mode, and why the habit of compaction matters more than any other optimisation. If you're spending real money on AI-assisted development, you'll come away with concrete tactics for cutting token burn without cutting capability. **Key takeaways** - Context window depth is the dominant driver of token cost; compacting actively at 200,000-300,000 tokens matters more than any other single action. - Cache expiry behaviour differs materially between providers: Anthropic's cache expires at exactly 1 hour, OpenAI's Codex cache is best-effort and often drops in 5-20 minutes, but OpenAI subscriptions do not charge for cache writes while Anthropic subscriptions effectively do through quota. - Using a frontier model with a simple prompt to delegate to cheaper subagents is a practical pattern that balances capability and cost without requiring complex harness engineering. - High thinking modes often produce worse results than medium or low because models overthink, invent requirements, and fix unrelated bugs; the benchmark sweet spot is typically medium. - Skills files, MCPs, auto-memories, and system prompts silently bloat context windows; regular clean-up every month or two reduces both cost and quality degradation. - Fast mode costs 2.5x per token but can improve output quality through tighter interaction loops; it is best used deliberately rather than left on by default. **Chapters** - 00:00 Introduction - 00:38 The Token Burn Problem - 03:12 Three Stages of Adoption - 07:03 Model Choices Multiplying - 11:14 The Cardinal Mistake: Depth - 18:13 Worst-Case Usage Patterns - 22:13 Picking Models by Feel - 30:23 Thinking Modes and Overthinking - 35:23 Fast Mode Trade-offs - 48:46 Caching: Anthropic vs OpenAI - 52:29 Context Window Ceiling - 56:32 Cleaning Up Context Bloat - 56:46 Where to Find Dave **Links and tools mentioned** - Antiburn: https://antiburn.com - Anthropic Claude: https://www.anthropic.com - OpenAI Codex: https://openai.com/codex - Harvey: https://www.harvey.ai - Legora: https://legora.com **About Dave Slutzkin** Co-founder of Antiburn, a company that helps developers understand and optimise their token spend for AI-assisted coding. This episode is presented by SparkLaunch and Dam Secure. - SparkLaunch (https://sparklaunch.io/wizardry): Applied Wizardry listeners get an extra 20% off. - Dam Secure (https://damsecure.ai/wizardry): Applied Wizardry listeners get their first month free. **Credits** - Justin McArthur, Executive Producer and Video Editor: https://www.linkedin.com/in/justin-mcarthur/ - Steph Hefferan, Editor: https://www.linkedin.com/in/steph-heff/