THE HIDDEN TAX OF AI Output Is King INPUT COST $2.50 Per 1M Tokens (GPT-4o) 4x MORE OUTPUT COST $10.00 Per 1M Tokens (GPT-4o) Enter fullscreen mode Exit fullscreen mode The reason? The AI writes very slowly on the inside — one token at a time. Last article we saw the Transformer architecture. Today we watch it in action during live generation — and discover why the output side is 4x more expensive. Here's something that surprises most developers when they first hear it: ChatGPT doesn't think its answer in advance and then display it. It predicts one token. Then another. Then another. Each prediction uses the previous ones as context. It's not writing — it's recursively predicting. Remember how the Transformer reads everything in parallel (previous article)? Generation flips that on its head — now it's forced to be sequential because each new token depends on the last. And understanding this one fact changes how you design prompts, control API costs, build streaming UIs, and debug unexpected AI behavior.…