GenAI & LLMs · 1 min read · Updated 2026-10-05
Tokens and the context window
What is a token?
AI does not read whole words. It cuts text into small pieces. Short, common words are often one token. Long or rare words are split into several. About 100 tokens equal 75 English words.
What is the context window?
It is the AI's short-term memory for one chat. It holds your question, the earlier messages, any pasted documents and the answer being written. If it gets full, the oldest parts get dropped.
Why it affects cost
Companies usually charge for the tokens you send in and the tokens the AI writes back, often priced per million. Shorter questions and answers cost less. Always check each company's price page for the latest rates.
Key takeaways
- Tokens are small pieces of text. They are what AI reads, writes and charges for.
- The context window is the AI's memory for one conversation.
- Shorter prompts cost less.
Quick questions
How many words is a million tokens?
About 750,000 English words.
What if I go over the limit?
Older text is dropped or the request fails.
Is a bigger window always better?
Not always. Giving only the useful parts often works better.