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AI Tokenomics in a Minute

Input vs Output Tokens

Why input and output tokens are priced and constrained differently in coding-agent workloads.

In one sentence

Input tokens are what you send to the model; output tokens are what the model generates—often billed at different rates and driven by different behaviors.

Why it matters

Agent sessions can be input-heavy (big context) or output-heavy (long patches and explanations). Optimizing the wrong side wastes money.

How it works

  • Count prompt, files, and tool results as input (subject to product rules).
  • Count completions—including code and chain-of-thought style outputs when billed—as output.
  • Compare unit prices: output is frequently more expensive per token.
  • Reduce input with caching/compaction; reduce output with tighter instructions and less narration when appropriate.

Example

A turn that re-sends a 200k-token repo summary and asks for a three-line fix is input-dominated. A turn that asks “rewrite the module and explain every line” is output-dominated.

What this proves

Provider usage breakdowns prove how many input vs output tokens were billed for a request or session.

What this does not prove

A high input share does not prove the context was necessary. A low output share does not prove the change was high quality.

Last reviewed 2026-09-06. Title for citation: AI Tokenomics in a Minute: Input vs Output Tokens.