Token-Operations-Oriented Inference Optimization Techniques for Large Models

Tokenization directly affects the inference efficiency of large language models, since fragmented tokenization increases sequence length and generation cost. Although longer, multi-word tokens can reduce fertility, naively adding them often degrades language model performance. We propose Thunder-Tok, a subword tokenizer that reduces fertility while preserving downstream performance. Thunder-Tok first constructs a large seed vocabulary from corpus substrings and filters structurally incomplete candidates, including invalid Unicode byte fragments and word-boundary violations. It then prunes the seed vocabulary using a likelihood-based token score derived from a uniform Jensen lower bound of the training-data probability. Experiments show that Thunder-Tok reduces fertility by approximately 25% in English and 9% in Korean compared with the standard BPE tokenizer while maintaining competitive performance.

Tokenization is a hardcoded compression step which remains in the training pipeline of Large Language Models (LLMs), despite a general trend towards architectures becoming increasingly end-to-end. Prior work has shown promising results at scale in bringing this compression step inside the LLMs' architecture with heuristics to draw token boundaries, and also attempts to learn these token boundaries with straight-through estimates, which treat the problem of drawing discrete token boundaries as a continuous one. We show that these token boundaries can instead be learned using score function estimates, which have tighter theoretical guarantees due to directly optimizing the problem of drawing discrete token boundaries to minimize loss. We observe that techniques from reinforcement learning, such as time discounting, are necessary to reduce the variance of this score function sufficiently to make it practicable. We demonstrate that the resultant method outperforms prior proposed straight-through estimates, both qualitatively and quantitatively at the $100$ million parameter scale.

Tokens have become the practical accounting unit for modern foundation model services, linking information processing, computation, memory use, energy expenditure, pricing, and economic value. This paper develops a framework for AI tokenomics: the study of how tokens are generated, consumed, priced, allocated, and optimized across AI systems. We connect token-level technical costs to workflow-level production functions, enterprise resource allocation, measurement and instrumentation methods, and emerging market-design questions. The framework shows that token expenditure and economic value are distinct: value depends on marginal productivity, workflow position, hidden reasoning activity, risk, and downstream propagation effects. The paper concludes by identifying open research directions in hidden-token measurement, empirical calibration, token productivity, dynamic allocation, and token-based markets.