Azeem Azhar

The atomic unit of manufactured intelligence, of AI, is the token.

Now, there are lots of limitations in the framing I'm about to give you, but this is a really helpful one to take away.

Think of it this way.

The token is effectively the unit of AI output.

It's a little bit of something that you can do something useful with.

A token is roughly three quarters of a word.

So if you get a 500 word email summarized into 100 words, that back and forth is probably a couple of thousand tokens.

And as we get more advanced, we move from back and forth models.

We move from summarizing emails to doing much more sophisticated things like summarizing.

please analyze these 10 vendor proposals and find what's common, what's different, and why I should prefer one over another.

I mean, that's going to be tens of thousands of tokens.

When you move to the reasoning models, usage increases really, really significantly.

And when you move to agentic systems, it moves even further.

Now, I discussed this a couple of weeks ago in an essay called Magnitudes of Intelligence.

So you can go back to the archive on Exponential View and find that essay online.

I made the point there that our mini Arnold, which is my open core agent, the AI chief of staff, had just consumed 100 million tokens in a single day.

And that was my average running.

And when I look back to the summer of 2024, so less than two years ago, I was at about maybe 100 to 150,000 tokens a day.

So that's a three order of magnitude increase.

in less than two years.