What is Tokens (AI)?
A token is a small unit of text, such as a whole word, part of a word or a punctuation mark, that a language model reads and writes. Providers measure context limits, speed and pricing in tokens, and in English one token averages roughly three quarters of a word.
Why it matters for your business
Most AI services bill per token, so understanding token usage helps you estimate running costs, set budgets and design prompts that stay within model limits.
A support team estimates monthly AI costs by multiplying average tokens per conversation by expected ticket volume, then shortens its system prompt to cut spend on every request.