Tokens Are New AI Currency. Here's Everything You Need to Understand Before You Spend Another Dollar
Every AI model runs on tokens. Every API bill is a token bill. Every context window limit is a token limit. Every speed difference between models comes down to how many tokens they process per second. Tokens are the single most important concept in generative AI, and most people using AI daily have only a vague idea what they actually are. This is the guide that fixes that.
The Bill That Made Me Stop and Actually Learn This
I got an AWS Bedrock bill for $340 one month. I was running an AI agent that processed customer support tickets. I had estimated maybe $50.
I had no idea what went wrong until I looked at the usage breakdown. The agent was reading the entire customer history, sometimes 200 emails, for every single ticket. Each email was roughly 500 tokens. 200 emails × 500 tokens = 100,000 tokens of input per...
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