token

A token is the basic unit of text that a large language model works with. Rather than reading whole words or letters, models break text into tokens — chunks that are, on average, about three-quarters of a word. Common words may be a single token, while longer or unusual words are split into several.

Tokens matter for two practical reasons. First, a model’s context window — how much it can consider at once — is measured in tokens, not words. Second, most AI services charge by the token, so the length of your input and the model’s output directly affects the cost.

Understanding tokens demystifies a lot of AI pricing and limits: when a provider quotes “a million tokens” or bills per token, they are really talking about roughly this many chunks of text going in and out.