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This chalk talk explores key design considerations for building cost-effective generative AI applications. We discuss model selection and optimization techniques, focusing on strategies for optimizing the Retrieval Augmented Generation (RAG) architecture. Learn about selecting the appropriate vector store and implementing efficient data storage and retrieval methods. Additionally, the talk covers prompt engineering best practices and demonstrates effective monitoring and cost-tracking approaches to ensure the overall cost-effectiveness of the generative AI solution. This chalk talk is intended for AWS Partners.