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Hosting your API on Vercel

Learn how to build and scale performant APIs on Vercel.
Last updated on February 9, 2025
Functions

Vercel is designed to help teams quickly build, deploy, and scale web applications. Whether you’re running an API for ecommerce, AI workflows, or internal tooling, Vercel’s compute platform provides an execution model that combines the flexibility of serverless with the efficiency of server-like concurrency. This guide covers everything you need to know about hosting your API on Vercel, including:

Vercel Functions can handle multiple concurrent requests on a single instance. This is particularly useful for slow I/O tasks (e.g., streaming tokens from AI model responses) because you don’t need to spin up a new function instance for every single request. This can make APIs on Vercel extremely cost efficient, as you can send many requests into a single function, like a server.

Deploying an API on Vercel means you also benefit from built-in multi-AZ (Availability Zone) redundancy and optional cross-region failover. If your primary region experiences downtime, traffic automatically reroutes to a backup location so your API remains online—critical for businesses that require high availability.

With bytecode caching and automatic pre-warming, Vercel reduces or removes cold starts for the majority of use cases. With Fluid compute, this applies to all plans.

By default, Vercel Functions speak HTTP, so features like streaming responses work out of the box. You can use this for real-time AI inference or partial page rendering (e.g., React Server Components). Furthermore, when your API data is cacheable, Vercel can store results globally, including advanced caching directives like stale-while-revalidate.

Every aspect—OS updates, runtime patching, kernel security, scaling, concurrency management—is automatically handled by Vercel. That means fewer ops tasks on your side and more time to focus on building your business logic.

Vercel provides automatic scaling up to tens of thousands of concurrent function instances—all without manual configuration or quota requests. To help you maintain control, you can set soft and hard usage caps and monitor your real-time usage within the Vercel dashboard. This ensures cost transparency and prevents unexpected bills.

Fluid compute is Vercel’s next-generation execution model for Functions. It combines the best parts of server-like concurrency with serverless autoscaling:

  • Optimized concurrency: Multiple requests share a single function instance, reducing cold starts and improving cost-efficiency.
  • Dynamic scaling: Functions can reuse idle capacity for new requests before scaling out, minimizing overhead during high traffic events.
  • Background processing: Use waitUntil() to continue work after sending an HTTP response—great for logging, analytics, or other tasks that shouldn’t block the end user.
  • Bytecode caching: Under Node.js 20+, your function code is compiled once and reused for subsequent cold starts, reducing initialization times significantly.
  • Zero configuration: When you enable fluid compute, default settings are applied automatically, optimizing for both performance and cost out of the box. This
  1. Go to Vercel Dashboard → Project Settings → Functions.
  2. Scroll to the Fluid Compute section and enable the toggle.
  3. Redeploy your project for the changes to take effect.

Fluid compute currently supports Node.js (version 20+) and Python runtimes.

Vercel is framework-agnostic. While many developers use Next.js for server-rendered web applications, you can just as easily host pure API endpoints. Vercel supports:

Node.js

Python

And more. Whether you’re spinning up a minimal Flask API or scaling a full-stack Next.js application, Vercel can handle the deployment and auto-scale it globally.

Vercel’s integrated observability provides both build-time logs and runtime logs, enabling you to quickly identify issues. You can also:

  • View latency, hit ratios, memory usage and more in Observability
  • View logs in the dashboard (including live tailing)
  • Drain logs to your own observability stack
  • Use advanced metrics like OpenTelemetry (OTEL) traces
  1. Go to Vercel Dashboard → Deployments.
  2. Select your deployment, then choose Logs.
  3. You can expand individual log entries for stack traces, timestamps, and more details.

If you prefer to centralize logs with providers such as Datadog or Logflare, you can configure a log drain from the same interface.

Secure Compute gives you private connectivity between your Vercel Functions and backends—without requiring you to expose them publicly. When you enable Secure Compute:

  • You receive dedicated static IP addresses for your functions.
  • You can configure a VPC peering or use a VPN so traffic never traverses the public internet.
  • You can optionally attach your build containers (for SSR or data fetching at build time) to the same private network.

This is ideal for enterprise use cases where security, compliance, or internal API connectivity is a requirement. Secure Compute is available on Enterprise plans and requires a quick setup flow where you specify your AWS region and any CIDR block requirements.

OIDC Federation removes the need to store long-lived credentials as environment variables. Instead, Vercel automatically issues short-lived tokens that your provider (AWS, GCP, Azure, or even your own custom API) trusts. Key benefits include:

  • No persisted credentials: Eliminates the risk of leaked secrets.
  • Granular access control: Grant specific roles per project or environment.
  • Local development: Obtain tokens securely in dev, without storing permanent keys locally.

When OIDC is enabled, each build and function invocation receives an automatically generated token. You then exchange that token with your cloud provider to obtain time-limited credentials. OIDC is available on all plans, at no additional cost.

You can also specify Function regions if you want more control over data locality or compliance needs.

  • Single-region: Pick a location close to your primary user base or your database.
  • Multi-region: Deploy the same function in multiple regions to reduce latency for global users.
  • Cross-region failover: If your primary region goes down, traffic automatically shifts to your backup region(s).

For compliance or advanced security scenarios, you can further combine region selection with Secure Compute. If you require private networking across multiple AWS regions, simply request additional Secure Compute networks via the Vercel dashboard or contact sales.

Vercel integrates seamlessly with popular data and storage providers. Through the Vercel Marketplace:

  • You can add first-party integrations to services like Postgres, Redis, and more.
  • The cost is the same as going directly to these providers.
  • You benefit from integrated billing through Vercel, simplifying payment and subscriptions.

This makes it easy to get started with a managed Postgres database or Redis cache without juggling multiple dashboards or billing portals.

Sometimes, a sudden surge of traffic hits an uncached route. With Incremental Static Regeneration (ISR), Vercel can “shield” the invocation to only one compute instance while the data is fetched or generated, and then serve the updated response to everyone else. This drastically reduces load spikes on your API or database.

Many APIs need to handle background tasks (e.g., analytics, logs, or generating notifications) that shouldn’t block the main response. With waitUntil() or an after function in Node.js, you can schedule work to happen once the response is sent, freeing the user from waiting for these extra processes.

Beyond usage analytics, Vercel lets you define spending thresholds to avoid runaway costs. If your API receives unexpected traffic, these thresholds can pause or throttle deployments before you incur excessive costs.

Vercel’s platform provides an all-in-one solution for developers looking to quickly build, deploy, scale, and secure APIs:

  • Serverless meets server-like concurrency via Fluid Compute
  • Scalable from zero to 100,000+ concurrent instances automatically
  • Automatic updates and high security by default
  • Secure networking with Secure Compute and OIDC Federation
  • Regional customization and cross-region failover for data locality and high availability
  • Rich observability and cost controls built in
  • Easy integration with databases and storage providers via the Vercel Marketplace

Whether you’re building a traditional REST API, streaming data for AI inference, or bridging multiple cloud systems, hosting your API on Vercel helps you deliver high-performance, globally available services without managing any lower-level infrastructure.

Get started for free or contact sales for information on Enterprise features like Secure Compute and advanced concurrency guarantees.

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