Large language model
AI models trained on large text corpora that power chat, coding, and search assistants — usually billed per token or via enterprise seat licenses.
Updated 2026-05-093 min read
Definition
A large language model (LLM) is a machine-learning model trained to understand and generate human language at scale — the technology behind tools such as ChatGPT, Claude, Copilot, and Gemini, delivered through APIs or packaged applications and a core part of generative AI.
Why it matters
Most enterprise AI spend traces to LLM usage — directly via API tokens or indirectly through per-seat copilots. Understanding LLM pricing is prerequisite to any credible AI budget.
Related Terms
Generative AI
AI systems that create text, code, images, or other content from prompts — typically priced via APIs, seats, or bundled SaaS features.
Token-based pricing
Billing for LLM API usage by tokens processed — input and output text converted to billable units that scale with every request.
Token cost
Per-token pricing charged by LLM providers for input and output — the primary cost driver for AI applications at scale.