I get this question weekly: should we fine-tune?
The answer is almost always "not yet." Here's the framework I've settled on.
The two axes
- Domain distance: how far is your task from the model's training distribution?
- Throughput: how many calls per day?
The four boxes
Low distance, low throughput → Prompt engineering. Don't fine-tune, don't even spend on RAG.
Low distance, high throughput → Prompt caching. You're paying for the same tokens over and over.
High distance, low throughput → Few-shot with retrieved examples. Fine-tuning rarely pays at low volume.
High distance, high throughput → Now you fine-tune. And only then.
The receipts
Three teams I've worked with ran this decision:
- Legal summarization SaaS: high distance, high throughput → fine-tuned a 7B model, cut costs 60%, latency 4×.
- Internal code-review bot: low distance, low throughput → stayed on frontier model with a well-engineered prompt. No fine-tune.
- Customer support assistant: high distance, low throughput → retrieved few-shot examples from ticket history. Beat the fine-tuned baseline they tried six months earlier.
The rule
Fine-tune when you have both a real distribution gap and enough calls to amortize the training cost. Otherwise you're buying a pet, not a tool.