Understanding Azure OpenAI Pricing & 6 Ways to Cut Costs

Azure OpenAI Service offers three pricing models: standard pay-as-you-go based on tokens processed, provisioned throughput units (PTUs) for predictable workloads with reserved capacity, and batch API with 50% discounts for non-time-sensitive tasks. Pricing varies significantly across model families, from GPT-5-nano at $0.05 per million input tokens to O1 at $15 per million. Cost optimization strategies include selecting appropriate models for workload requirements, engineering efficient prompts to minimize token usage, implementing caching for repeated queries, optimizing regional deployment and throughput allocation, and using monitoring tools like Azure Cost Management or specialized FinOps platforms for granular visibility and allocation.