← Back to the AI Glossary 📖 Business & Product

Token-Based Pricing

A pricing model where the cost of using an AI service is based on the number of tokens processed (input and/or output), rather than a flat subscription fee.

This is standard for developer-facing AI APIs, and it's why the cost of the exact same task can vary a lot depending on how verbose the prompt or response is.
One of 60 free AI glossary terms
Plain-language definitions for the AI jargon you'll actually run into — no email needed, ever, for this section.
Browse the Full Glossary →