
Under the hood of every AI application are algorithms that churn through data in their own language, one based on a vocabulary of tokens.
Tokens are tiny units of data that come from breaking down bigger chunks of information. AI models process tokens to learn the relationships between them and unlock capabilities including prediction, generation and reasoning. The faster tokens can be processed, the faster models can learn and respond.
AI factories - a new class of data centers designed to accelerate AI workloads - efficiently crunch through tokens, converting them from the language of AI to the currency of AI, which is intelligence.
With AI factories, enterprises can take advantage of the latest full-stack computing solutions to process more tokens at lower computational cost, creating additional value for customers. In one case, integrating software optimizations and adopting the latest generation NVIDIA GPUs reduced cost per token by 20x compared to unoptimized processes on previous-generation GPUs - delivering 25x more revenue in just four weeks.
By efficiently processing tokens, AI factories are manufacturing intelligence - the most valuable asset in the new industrial revolution powered by AI.
What Is Tokenization? Whether a transformer AI model is processing text, images, audio clips, videos or another modality, it will translate the data into tokens. This process is known as tokenization.
Efficient tokenization helps reduce the amount of computing power required for training and inference. There are numerous tokenization methods - and tokenizers tailored for specific data types and use cases can require a smaller vocabulary, meaning there are fewer tokens to process.
For large language models (LLMs), short words may be represented with a single token, while longer words may be split into two or more tokens.
The word darkness, for example, would be split into two tokens, dark and ness, with each token bearing a numerical representation, such as 217 and 655. The opposite word, brightness, would similarly be split into bright and ness, with corresponding numerical representations of 491 and 655.
In this example, the shared numerical value associated with ness can help the AI model understand that the words may have something in common. In other situations, a tokenizer may assign different numerical representations for the same word depending on its meaning in context.
For example, the word lie could refer to a resting position or to saying something untruthful. During training, the model would learn the distinction between these two meanings and assign them different token numbers.
For visual AI models that process images, video or sensor data, a tokenizer can help map visual inputs like pixels or voxels into a series of discrete tokens.
Models that process audio may turn short clips into spectrograms - visual depictions of sound waves over time that can then be processed as images. Other audio applications may instead focus on capturing the meaning of a sound clip containing speech, and use another kind of tokenizer that captures semantic tokens, which represent language or context data instead of simply acoustic information.
How Are Tokens Used During AI Training? Training an AI model starts with the tokenization of the training dataset.
Based on the size of the training data, the number of tokens can number in the billions or trillions - and, per the pretraining scaling law, the more tokens used for training, the better the quality of the AI model.
As an AI model is pretrained, it's tested by being shown a sample set of tokens and asked to predict the next token. Based on whether or not its prediction is correct, the model updates itself to improve its next guess. This process is repeated until the model learns from its mistakes and reaches a target level of accuracy, known as model convergence.
After pretraining, models are further improved by post-training, where they continue to learn on a subset of tokens relevant to the use case where they'll be deployed. These could be tokens with domain-specific information for an application in law, medicine or business - or tokens that help tailor the model to a specific task, like reasoning, chat or translation. The goal is a model that generates the right tokens to deliver a correct response based on a user's query - a skill better known as inference.
How Are Tokens Used During AI Inference and Reasoning? During inference, an AI receives a prompt - which, depending on the model, may be text, image, audio clip, video, sensor data or even gene sequence - that it translates into a series of tokens. The model processes these input tokens, generates its response as tokens and then translates it to the user's expected format.
Input and output languages can be different, such as in a model that translates English to Japanese, or one that converts text prompts into images.
To understand a complete prompt, AI models must be able to process multiple tokens at once. Many models have a specified limit, referred to as a context window - and different use cases require different context window sizes.
A model that can process a few thousand tokens at once might be able to process a single high-resolution image or a few pages of text. With a context length of tens of thousands of tokens, another model might be able to summarize a whole novel or an hourlong podcast episode. Some models even provide context lengths of a million or more tokens, allowing users to input massive data sources for the AI to analyze.
Reasoning AI models, the latest advancement in LLMs, can tackle more complex queries by treating tokens differently than before. Here, in addition to input and output tokens, the model generates a host of reasoning tokens over minutes or hours as it thinks about how to solve a given problem.
These
More from Nvidia
09/01/2026
Every that was easy shopping moment is made possible by teams working to hit s...
08/01/2026
The next universal technology since the smartphone is on the horizon - and it ma...
08/01/2026
In the rolling hills of Berkeley, California, an AI agent is supporting high-stakes physics experiments at the Advanced Light Source (ALS) particle accelerator....
08/01/2026
NVIDIA is wrapping up a big week at the CES trade show with a set of GeForce NOW...
07/01/2026
AI has transformed retail and consumer packaged goods (CPG) operations, enhancin...
05/01/2026
At the CES trade show running this week in Las Vegas, NVIDIA announced that the ...
05/01/2026
Open-source AI is accelerating innovation across industries, and NVIDIA DGX Spar...
05/01/2026
NVIDIA DGX SuperPOD is paving the way for large-scale system deployments built on the NVIDIA Rubin platform - the next leap forward in AI computing.
At the CES...
05/01/2026
AI is powering breakthroughs across industries, helping enterprises operate with...
05/01/2026
NVIDIA founder and CEO Jensen Huang took the stage at the Fontainebleau Las Vega...
05/01/2026
At the CES trade show, NVIDIA today announced DLSS 4.5, which introduces Dynamic...
05/01/2026
2025 marked a breakout year for AI development on PC.
PC-class small language m...
05/01/2026
Announced at the CES trade show running this week in Las Vegas, NVIDIA is bringi...
01/01/2026
New year, new games, all with RTX 5080-powered cloud energy. GeForce NOW is kicking off 2026 by looking back at an unforgettable year of wins and wildly high fr...
25/12/2025
Holiday lights are twinkling, hot cocoa's on the stove and gamers are settling in for a well-earned break.
Whether staying in or heading on a winter getawa...
22/12/2025
The works of Plato state that when humans have an experience, some level of change occurs in their brain, which is powered by memory - specifically long-term me...
18/12/2025
NVIDIA will join the U.S. Department of Energy's (DOE) Genesis Mission as a ...
18/12/2025
Top-notch options for AI at the desktops of developers, engineers and designers ...
18/12/2025
Step out of the vault and into the future of gaming with Fallout: New Vegas streaming on GeForce NOW, just in time to celebrate the newest season of the hit Ama...
17/12/2025
The Hao AI Lab research team at the University of California San Diego - at the forefront of pioneering AI model innovation - recently received an NVIDIA DGX B...
17/12/2025
Editor's note: This post is part of Into the Omniverse, a series focused on ...
15/12/2025
NVIDIA today announced it has acquired SchedMD - the leading developer of Slurm, an open-source workload management system for high-performance computing (HPC) ...
15/12/2025
Modern workflows showcase the endless possibilities of generative and agentic AI on PCs.
Of many, some examples include tuning a chatbot to handle product-supp...
12/12/2025
In Las Vegas's T-Mobile Arena, fans of the Golden Knights are getting more than just hockey - they're getting a taste of the future. ADAM, a robot devel...
11/12/2025
Unveiling what it describes as the most capable model series yet for professional knowledge work, OpenAI launched GPT-5.2 today. The model was trained and deplo...
11/12/2025
Hunters, saddle up - adventure awaits in the cloud.
Journey into the world of M...
10/12/2025
The NVIDIA accelerated computing platform is leading supercomputing benchmarks once dominated by CPUs, enabling AI, science, business and computing efficiency w...
10/12/2025
The world's top-performing system for graph processing at scale was built on...
10/12/2025
As the scale and complexity of AI infrastructure grows, data center operators need continuous visibility into factors including performance, temperature and pow...
04/12/2025
Developers, researchers, hobbyists and students can take a byte out of holiday s...
04/12/2025
Editor's note: The Game Pass edition of Hogwarts Legacy' will also be supported on GeForce NOW when the Steam and Epic Games Store versions launch on t...
03/12/2025
The top 10 most intelligent open-source models all use a mixture-of-experts arch...
02/12/2025
Today, Mistral AI announced the Mistral 3 family of open-source multilingual, multimodal models, optimized across NVIDIA supercomputing and edge platforms.
M...
02/12/2025
At AWS re:Invent, NVIDIA and Amazon Web Services expanded their strategic collab...
01/12/2025
Researchers worldwide rely on open-source technologies as the foundation of their work. To equip the community with the latest advancements in digital and physi...
27/11/2025
Black Friday is leveling up. Get ready to score one of the biggest deals of the season - 50% off the first three months of a new GeForce NOW Ultimate membership...
25/11/2025
Black Forest Labs - the frontier AI research lab developing visual generative AI models - today released the FLUX.2 family of state-of-the-art image generation ...
24/11/2025
Editor's note: This post is part of the AI On blog series, which explores the latest techniques and real-world applications of agentic AI, chatbots and copi...
20/11/2025
Editor's note: This post is part of Into the Omniverse, a series focused on how developers, 3D practitioners and enterprises can transform their workflows u...
20/11/2025
The NVIDIA Blackwell RTX upgrade is nearing the finish line, letting GeForce NOW Ultimate members across the globe experience true next-generation cloud gaming ...
20/11/2025
Tanya Berger-Wolf's first computational biology project started as a bet wit...
18/11/2025
Timed with the Microsoft Ignite conference running this week, NVIDIA is expandin...
18/11/2025
Today, Microsoft, NVIDIA and Anthropic announced new strategic partnerships. Anthropic is scaling its rapidly growing Claude AI model on Microsoft Azure, powere...
18/11/2025
AI agents have the potential to become indispensable tools for automating complex tasks. But bringing agents to production remains challenging.
According to Ga...
17/11/2025
NVIDIA Apollo - a family of open models for accelerating industrial and computat...
17/11/2025
To power future technologies including liquid-cooled data centers, high-resoluti...
17/11/2025
At SC25, NVIDIA unveiled advances across NVIDIA BlueField DPUs, next-generation networking, quantum computing, national research, AI physics and more - as accel...
17/11/2025
Across quantum physics, digital biology and climate research, the world's researchers are harnessing a universal scientific instrument to chart new frontier...
17/11/2025
It used to be that computing power trickled down from hulking supercomputers to ...
14/11/2025
Today's AI workloads are data-intensive, requiring more scalable and afforda...