Lexicon / CONCEPT

Tokens

The smallest units of text that AI models process. Words, parts of words, or punctuation marks are each converted into tokens.

Tokens are how AI models read and write text. A token can be a whole word like “hello”, part of a word like “un” + “believe” + “able”, or even a single character.

Why Tokens Matter

AI providers charge based on tokens processed. Both your input (prompt) and the model’s output count toward usage. Typical pricing is quoted per million tokens.

Rough Token Estimates

1 word ≈ 1.3 tokens (English)
750 words ≈ ~1,000 tokens
A short email ≈ 200–400 tokens

How Pricing Works

Providers like OpenAI and Anthropic charge separately for input tokens (what you send) and output tokens (what the model generates). Output tokens are usually more expensive.