Glossary / AI spend
Token
The small unit of text an AI model reads and writes, and the unit providers charge by.
A token is a chunk of a word. As a rough rule of thumb, 1,000 tokens is a little under 750 English words, though it varies by model and language. Providers usually price input tokens (what you send) and output tokens (what the model writes) separately.
Why it matters. Cost scales with tokens, so a loop that sends the same long request again and again can multiply a bill quickly.
Related terms
General information, not legal advice. Rules and dates change, so check the source before relying on them.