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Leadership asks "how much will this AI feature cost per month" mid-meeting - what do you estimate with?

Answer the compute/API cost question on the spot, no engineer needed

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Action framework

  1. Estimate monthly API calls: active users × how often each one uses the feature.
  2. Estimate average tokens per call (input + output) - round numbers are fine, you don't need exact precision.
  3. Multiply calls × tokens × the model's token price to get the base cost.
  4. Add a buffer (typically 20-30%) for retried failed calls or traffic spikes.
  5. Compare the estimate against a known budget threshold - if it's over, say so directly instead of just handing over a number.

Before

"I'm not sure, let me check with engineering."

After

"10,000 active users × 5 calls/month × 1,500 tokens/call × $0.002/1K tokens ≈ $150/month, plus a 25% buffer ≈ $190/month - within the approved $500 budget."

Go deeper: Lesson 14 - AI PM