Token

Argentix Consulting
Definition

Token

A token is the small unit of text, a word, part of a word, or a character, that an AI language model reads and generates one piece at a time. Unlike a whole word, which is how people count text, a token is how the model counts it, and a single word can be one token or several. Argentix pays attention to tokens because they are the unit you are billed in and the unit that limits how much a model can read or write at once.

Every AI provider prices by the token and caps each request by a token limit, so tokens are both your meter and your ceiling. A rough rule is that a token is about three-quarters of a word in English, which means a page of text runs a few hundred tokens. This matters when you feed a model long documents or run high volumes, because costs and limits are counted in tokens, not pages. For an SMB, understanding tokens is what turns a surprising AI bill into a predictable one you can budget and control.

Why it matters

The stakes

Tokens are how AI tools charge you and how they limit what you can send, so a plan that ignores them can produce a bill you did not expect. A long document or a chatty automation burns tokens fast, and costs scale with volume. Knowing the rough token cost of your workload lets you estimate spend up front and avoid unpleasant surprises.

Sources

Further reading

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