Token cost
The price charged for processing individual units of text in an AI model, based on how much input and output the model generates.
In Plain English
A token is a small chunk of text—usually a few characters or a whole short word—that AI models process. Every time an AI model reads your input or writes an answer, it consumes tokens, and companies charge money for those tokens. The cost is typically split: you pay a lower rate for input tokens (what you ask) and a higher rate for output tokens (what the model generates), because generating new text requires more computational effort. Understanding token cost is like understanding cell phone billing: you're charged for data consumed, so longer conversations and larger responses cost more money.
💡Real-World Example
A small business owner uses an AI writing assistant to generate product descriptions. She writes a 100-word description request (maybe 150 tokens), and the AI generates a 200-word polished description (maybe 300 tokens). If input tokens cost $0.01 per thousand and output tokens cost $0.03 per thousand, this single description costs roughly a quarter of a cent.
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