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Glossary Term
AI & LLM

Token Cost

The pricing model for LLM APIs based on the number of tokens (text units) processed in inputs and outputs.

Related Service: Custom Solutions

Token cost: what makes AI usage expensive

Token cost is the practical “meter” behind AI usage: longer prompts, longer outputs, and repeated calls usually cost more. The main cost-control lever is to minimise unnecessary text while keeping outputs reliable.

Common cost drivers

  • Sending large documents every request instead of retrieving only what’s needed.
  • Allowing verbose outputs when a structured short format would work.
  • Retry loops caused by unclear instructions or missing constraints.

How to reduce token cost

  • Use retrieval and include only relevant excerpts.
  • Standardise outputs (JSON, bullet templates) and cap length explicitly.
  • Cache results for repeated queries and common tasks.

More AI & LLM terms

Browse related definitions in the same glossary category.

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Where this term is applied

Related GEO services, audits, and frameworks that operationalise Token Cost in commercial execution.

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