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Written by Max Zeshut
Founder at Agentmelt · Last updated May 26, 2026
The process of converting raw text into tokens—the smallest units an AI model processes. Tokenizers split words, subwords, and punctuation into integer IDs that the model understands. Tokenization determines how much text fits in a context window, how much inference costs (pricing is per-token), and can affect multilingual performance since non-English languages often require more tokens per word. Understanding tokenization helps teams estimate operating costs and optimize prompt length for their agents.
The sentence 'AI agents automate workflows' tokenizes to roughly 5 tokens in most models. A 1,000-word support article is about 1,300 tokens. At $3 per million input tokens, processing that article costs $0.004—but processing 10,000 articles daily adds up to $40/day.