Tokens are small units of text, roughly four characters in English, that large language models process. For API usage, you are billed for both input tokens (the text you send to the model) and output tokens (the AI's generated response), with output tokens typically being more expensive due to higher computational requirements.

On a token-for-token basis, xAI's foundational models like Grok-2 are competitive, often slightly cheaper on input tokens than OpenAI's very popular GPT-4o. Grok Vision also offers competitive xAI pricing compared to some multimodal alternatives available from other providers.

Hidden costs can include significant expenses for developer salaries to build and maintain solutions, infrastructure costs for hosting your application, and the complexity of integrating the AI with existing business tools. Additionally, unpredictable usage volumes can lead to rollercoaster billing that makes budgeting difficult.