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Token Pricing: What You're Actually Paying For

When you use an AI, you're not paying per question or per minute — you're paying per 'token,' which is basically a small chunk of text. Think of tokens like LEGO pieces that words get broken into. The word 'hamburger' might be two tokens. The word 'hi' is one. Every word you send to the AI costs tokens, and every word it sends back costs tokens too. AI companies charge you a price per thousand or million tokens used. The more you chat, the more tokens you burn, and the bigger your bill.

Example: You ask ChatGPT's API to summarize a 10-page report. That report might use 3,000 tokens going in, and the summary uses 300 tokens coming out — you're billed for all 3,300 tokens at whatever rate that model charges.