Chain-of-Thought Has an Efficiency Tax. Most Teams Don't Measure It.

Chain-of-thought (CoT) prompting improves LLM reasoning quality but generates 3x–10x more tokens, creating a largely unmeasured 'efficiency tax' that can dramatically inflate production costs. Teams typically fail to measure this due to accuracy bias, scale hiding the problem, and the 'optimize later' fallacy. CoT is justified only for multi-step reasoning, high-stakes low-volume decisions, and cases where the quality delta is explicitly measured.