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AI & Machine Learning · Foundational

Token Pricing

Charging for LLM usage per input and output token, often with separate rates for cached and batched tokens.

Definition

Output tokens usually cost more than input tokens. Costs are reduced with smaller models, prompt caching, batch APIs, concise prompts, output limits and routing. Provisioned throughput offers reserved capacity at fixed cost for steady high volume.

Exam tip

Cost-reduction answers: smaller model, prompt caching, batch inference, shorter prompts and outputs.

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