Tokens & Tokenization
Concept
Core Technical
The unit AI is bought, sold and measured in.
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Models read and write tokens — word fragments, roughly ¾ of an English word each. Context windows, API prices, throughput benchmarks and 'tokens per second' hardware claims all count them. When executives describe data centers as 'token factories,' this is the commodity they mean: the entire economics of inference reduces to the cost of producing a token.
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Related
Sources
Record reviewed as of 2026-01-15 — see Methodology.