How to Count LLM Tokens and Calculate API Costs

What are LLM tokens, how do you count them, and how do they affect API costs? This video explains tokenization with practical examples using text, Python code, and JSON. We write prompts in words, but LLMs work with tokens. Let’s look at what gets counted and why your visible prompt isn’t always the complete input. In this video: • Why one word doesn’t always equal one token • Why tokenizers use smaller, reusable text pieces • What token IDs represent • How to inspect and count your own inputs • Input tokens versus output tokens • How to read API usage and calculate basic token costs This is episode two of LLM Foundations for Software Engineers - a foundation-first AI series for people who build, or are learning to build, software. Basic software familiarity is helpful. No machine-learning background is required. The goal isn’t to chase every AI announcement. It’s to understand the foundations so new developments are easier to make sense of. The API prices and request usage in the calculation are hypothetical teaching examples, not current model pricing. #LLM #Tokenization #SoftwareEngineering