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What is prompt caching in LLMs?

Prompt caching is a technique where the initial part of a long prompt given to a large language model (LLM) is stored in memory after being processed once. This avoids re-computation for subsequent, similar requests, significantly speeding up responses and reducing costs for repetitive queries in financial analysis.

WHY IT MATTERS

Optimizes performance and cost-efficiency for LLM applications in BFSI, crucial for high-volume tasks like legal document review or customer service automation.

Source: Google Research · 2026-05-18

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What is prompt caching in LLMs? — ath