171 - AI SERIES: 14 - How to Avoid Massive AI API Costs with Michael Greenberg Artwork

Nikonomics - The Economics of Small Business

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Nikonomics - The Economics of Small Business

171 - AI SERIES: 14 - How to Avoid Massive AI API Costs with Michael Greenberg

May 15, 2025 • Nikolas Hulewsky • Season 1 • Episode 171

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Join me, Nik (https://x.com/CoFoundersNik), as I interview Michael Greenberg (https://x.com/@gentoftech), serial entrepreneur and AI guru. Michael shares how he's using AI in his multiple businesses, from ghostwriting to podcast booking.

We dive into the world of AI models, discussing which ones Michael uses daily, like Gemini 2.5 Pro and O3 mini high, and why he's moved away from others like GPT 4.0 for most tasks. Learn the critical difference between standard models and powerful reasoning models, and why the latter are essential for business logic, complex problems, and even math.

We also unpack the importance of the context window and how models like Gemini excel here. Plus hear a cautionary tale about a $4,000 AI API bill and how they fixed it.

Enjoy the conversation!

Questions This Episode Answers:
What AI models should I use for business tasks?
What's the difference between standard and reasoning AI models?
Why is the context window important for AI?
How can Anthropic's Workbench help me write better prompts?
How do I avoid huge AI API costs?
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This week we covered:

00:00 The Cost of AI in Business

02:58 Choosing the Right AI Models

05:55 Understanding Reasoning Models