AI Glossary
Cost Per Token
Understanding AI Terminology
The price charged for processing each token of input or output.
What It Means
Cost per token is how AI providers price their APIs, typically expressed as dollars per million tokens (or per thousand tokens). Most providers charge different rates for input tokens (your prompt) and output tokens (the response), with output typically costing more. Understanding token costs helps estimate expenses and choose cost-effective models for different tasks.
Examples
- GPT-4o costs $5/1M input tokens and $15/1M output tokens
- Claude Haiku is much cheaper at $0.25/1M input tokens
- A 1000-word response might cost fractions of a cent with efficient models
How This Applies to ARKA-AI
ARKA-AI shows transparent cost breakdowns for every request, helping you understand and optimize your AI spending.
Frequently Asked Questions
Common questions about Cost Per Token
Estimate tokens (roughly 1 per word), multiply by the per-token rate. ARKA-AI shows actual costs after each request, so you can track real spending.
Generating output requires sequential computation (predicting each token), while input can be processed in parallel. Generation is more computationally intensive.
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