Why LLMs Predict Tokens Instead of Words
Last Updated on September 22, 2026 by Editorial Team
Author(s): “The AI Engineer”
Originally published on Towards AI.
Why LLMs Predict Tokens Instead of Words
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The article explains that LLMs work on token units rather than words or characters, because word-level modeling requires an impractically large vocabulary and character-level modeling is too inefficient due to longer sequences. It describes how byte pair encoding (BPE) tokenizers build a manageable vocabulary by repeatedly merging frequent byte/character pairs, causing common words and affixes to become single tokens while rare words are split into known subparts. It then highlights a “tokenizer tax”: most tokenizers are trained on English-heavy data, so other languages can require dramatically more tokens for the same content, shrinking effective context windows and increasing real costs. Although newer tokenizers reduce some of this penalty (e.g., OpenAI’s o200k_base versus older models), true improvement requires retraining rather than a simple switch, since tokenization is baked into model training. Finally, it advises builders to measure cost and context using the actual tokenizer per language and to track effective context rather than advertised token limits, concluding that tokenization biases are measurable, published, and disproportionately paid by users in lower-resource language communities.
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