How to design pricing for AI APIs and LLM-powered products

AI API pricing comes down to six decisions, in order: what to meter, which primitive to charge for, what to charge per unit, how to structure tiers, hard cap or soft cap, and how the credit wallet behaves. This guide walks through each one with worked examples and dollar amounts. There's a Claude prompt at the end you can paste in to diagnose your own pricing. The reason for writing this blog post is because I was talking to a founder who showed me his pricing page pricing page, that said "$0.0...