Do they just set a super low caching time and hope that drops effective cache rates low enough? Do all other providers somehow overcharge by that much? Are they just going to sell it as a loss leader?
This, I think. Cached inputs have an opportunity cost (keeping the KV cache until use) but a hit is basically free. “Basically” - if the cache is offloaded to system RAM or NVMe there’s some scheduling overhead.
From a consumer viewpoint a more interesting metric than the raw costs is
cached cost * hitrate + input cost * (1 - hitrate)
This can somewhat be the case, depending on your config. I updated mine to make DeepSeek high priority because I was having a lot of cache misses and reliability issues with the default (cheapest (at face value)) providers, and cost was actually higher overall than anticipated. Was smooth sailing from then; might have to tweak things again now pricing has changed though.
Not sure if this was an OpenRouter issue or with the other inference providers.
I don't have a clue on what the real cost to inference providers comes out to, but it seems really weird that there would be such a big gap, in what should be a pretty competitive market.