What is usage-based billing?

Definition

Usage-based billing converts measured service consumption into an invoice. In artificial intelligence services the units may include input and output tokens, requests, compute time or generated assets, with different rates for different models and features.

This approach can align price with actual demand, but customers need transparent units, predictable limits and access to usage records. Providers need accurate metering, pricing version control and safeguards against duplicate or unauthorized consumption.

Acronyms and aliases

consumption billing synonymmetered billing synonym

Frequently asked questions

How is usage-based billing different from a subscription?

A subscription charges a recurring fixed amount, while usage-based billing varies with measured consumption. A service can combine both approaches.

Why is token billing common for AI models?

Tokens approximate the amount of language-model processing used by a request, making them a practical unit for metering variable inference demand.

Videos explaining usage-based billing