Insights How AI Tokenization Works: Models, Costs, and the Hidden Economics of Token Consumption Jun 30, 2026AI, Mastering AI Economics Series Download Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend. Understanding AI tokenization is the foundation of effective enterprise AI cost management. As part of NPI’s Mastering AI Economics: A Procurement Leadership Series, this whitepaper explains how AI models process and bill tokens, why the cheapest model isn’t always the lowest-cost option, and how procurement teams can make smarter decisions about AI consumption before costs spiral. In this whitepaper, you’ll learn: How tokenization works and why it drives AI costs The difference between input and output tokens and why it matters Why lower-cost models can become more expensive for complex workloads How Batch API and Prompt Caching can dramatically reduce AI costs Practical guidance for selecting the right model for the right workload Download the whitepaper to build a stronger understanding of AI cost drivers and make more informed AI procurement decisions. Download Share This Article Subscribe For Updates Uncover negotiation leverage and unlock savings across your IT spend.