Token
Category: AI Usage
📖 Definition
A token is the basic unit of text that AI models process. Roughly 4 characters or 1 word equals 1 token. API pricing and context limits are measured in tokens.
🔑 Key Points
- Approximately 1 token ≈ 4 characters or 0.75 words
- Your input + AI's output must fit within context window
- Pricing is typically per 1 million tokens
- Efficient token usage can significantly reduce costs
💡 Why It Matters
Understanding tokens helps you estimate costs and manage AI usage efficiently. It's fundamental to using AI APIs effectively.