ai-literacyintermediateunit-5

Inference Cost

Definition

The cost of generating AI outputs when users ask the model to do work.

In Plain English

Inference cost is like paying for electricity every time the machine runs.

Real-World Example

A chat product with heavy usage may spend money for every user message and AI response.

Why It Matters for Your Work

Inference costs can turn a popular AI feature into an expensive one.

Common Mistake

Pricing an AI product without modeling usage costs.

Related Terms

LLM

Large Language Model—AI trained on massive text data to understand and generate language.

Token

A chunk of text that AI reads or writes, roughly 3-4 characters or about 0.75 words.

Model Provider

A company that supplies AI models through an API or platform.