Type any sentence above. Models don't read words like we do—they read chunks of characters called Tokens.
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Artificial·Intelligence·is·fascinating!
Notice how words might be split, and spaces are included. A rough rule of thumb: 1000 tokens ≈ 750 words.
Why Tokens Matter?
Cost
API usage is often billed by token count (input + output).
Memory
Models have a 'Context Window' limit (e.g. 128k tokens) which determines how much they can remember.
Computation
More tokens mean more processing power and time required to generate a response.