AI model pricing looks cryptic — "$3 per million input tokens, $15 per million output" — but the system underneath is simple, and understanding it explains why some AI subscriptions cost $5 and others $200. Here's how it works, with live 2026 prices below.
Tokens: the Unit Everything Is Priced In
Models don't read words; they read tokens — chunks of roughly ¾ of an English word. "Understanding" is one word but may be two tokens; 1,000 tokens is about 750 words. Every price you'll ever see for AI is per token, usually quoted per million.
Input vs Output Pricing
Providers charge separately for input (your prompt, attached files, and the whole conversation so far) and output (the model's reply). Output typically costs 3-5x more than input, because generating text is more computationally expensive than reading it. Long conversations get gradually costlier: each new message re-sends the growing history as input.
Why Prices Vary 1000x Between Models
The spread is enormous: free models cost $0, budget models pennies per million tokens, and premium reasoning flagships can exceed $75 per million output tokens. You're paying for model size, reasoning capability, and provider margins. The live table below ranks today's cheapest paid models — note how many capable models sit under $1 per million.
What This Means for Your Subscription
Subscription apps convert token pricing into something humans can budget: a monthly usage allowance. On CoreAI, every plan includes a monthly allowance that works across all 300+ models — chat with a $0.10/1M budget model and it barely dents the allowance; lean on a premium reasoning model and it draws proportionally more. One subscription, no per-token invoices, no surprise bills.
How to Spend Less on AI
- Default to cheap or free models; escalate to premium models only for hard tasks.
- Start new conversations for new topics — shorter history means fewer input tokens per message.
- Use reasoning modes deliberately: the "thinking" tokens are billed as output.