What is the difference between RAG and CAG in terms of Latency?

RAG has 500ms - 2s, while CAG has < 50ms.

What is the difference between RAG and CAG in terms of Cost?

RAG has Variable (Vector DB + Inference), while CAG has 90% Cheaper (Prompt Caching).

RAG has Limited (Chunked), while CAG has Large (Full-context).

RAG has Fragmented, while CAG has Superior (Narrative Flow).

RAG has Variable (Vector DB + Inference), while CAG has 90% Cheaper (Prompt Caching).

RAG has Limited (Chunked), while CAG has Large (Full-context).

RAG has Fragmented, while CAG has Superior (Narrative Flow).

A technical comparison of Retrieval-Augmented Generation (RAG) vs Cache-Augmented Generation (CAG) for personal and enterprise knowledge bases.

Capability	RAG	CAG
Latency	500ms - 2s	< 50ms
Cost	Variable (Vector DB + Inference)	90% Cheaper (Prompt Caching)
Context Window	Limited (Chunked)	Large (Full-context)
Reasoning Quality	Fragmented	Superior (Narrative Flow)

The Verdict

Use CAG for static datasets under 1M tokens (Obsidian vaults, Docs). Use RAG for massive, frequently changing dynamic data.