Learn AI · 6 min read

How much does AI actually cost? A plain-English pricing guide

AI pricing is confusing: subscriptions, free tiers, “tokens”, per-seat business plans. This guide explains all of it in plain English with real GBP figures — and shows you the gap most people never see. CheyX has no affiliate links, so nothing here is trying to sell you anything.

The three ways you can pay for AI

1. Free tiers. ChatGPT, Claude, Gemini and Perplexity all have them. They’re real and useful, with limits on volume and access to the best models. For occasional use — a few tasks a week — many people never need to pay at all.

2. Subscriptions (what most people choose). A flat monthly fee for higher limits and stronger models:

Simple, predictable — and completely disconnected from how much you actually use.

3. Pay-per-use (the API). The same underlying models, billed by the amount of text processed. This is how businesses and developers buy AI, and the unit prices are startlingly small.

“Tokens”, translated

API pricing is quoted per million tokens. A token is roughly three-quarters of a word, so 1 million tokens ≈ 750,000 words — about ten novels. When a price sheet says a model costs ~£0.45 per million output tokens, it means a full page of generated text costs a fraction of a penny. That’s the entire mystery. Everything else is multiplication.

The gap nobody shows you

Here’s the same workload — 100 email-length writing tasks a month — priced both ways:

Same task, up to a £240/year difference. The subscription isn’t a scam — you’re paying for the chat interface, memory, file uploads and zero setup. But you should know the size of the convenience fee, because for light users it’s most of the bill.

So which should you choose?

Stay on a free tier if you use AI a few times a week and don’t hit limits.

A subscription is right if you use AI heavily most days, want file uploads, memory, image generation and custom assistants, and the time saved is worth £18–20/month. For genuinely heavy users it’s excellent value.

Pay-per-use wins if your usage is light-to-moderate or repetitive (e.g. customer replies at volume), and you — or someone technical — can spend ~30 minutes setting it up once. Third-party chat apps and API “playgrounds” have made this far less technical than it sounds.

Businesses: the maths gets sharper with team seats. Five ChatGPT Plus-style seats is ~£1,200/year; the same light usage via API can be under £50/year. At 500+ automated tasks a month, the API is almost always the right answer.

Prices verified May–June 2026 at a GBP/USD rate of ~0.79. AI prices change frequently — CheyX re-verifies monthly.