API, decoded
You will see the word on every pricing page. An API is how one program talks to another. What it means for you, when you would use one, and the price trap.
By Nick
On this page
Before you start
An API is the hatch between two programs. One slides a written order through; the other sends back the result. No screen, no buttons, no person. Just program to program.
When you type into ChatGPT, the app takes your words and passes them through that hatch to the model (the AI system that writes the replies), then shows you what came back. The app is a nice front on the API. Programmers can skip the front and use the hatch directly.
Why you would ever care
Three situations.
Something of yours wants to talk to the model. A script that summarises your inbox each morning, a spreadsheet that drafts replies, an agent you run on your own machine. They cannot type into an app. They use the API.
You want to pay per use instead of per month. API access bills by the token. Light use is pennies. Heavy use can cost more than a subscription, which is the trap.
A tool you are setting up asks for an API key. That is it asking for the password to your hatch. It will spend your money through it, so give it a key with a spending cap.
The one rule
Set a monthly limit on the API account before anything runs unattended. An agent in a loop is an expensive agent, and you will not find out until the invoice.
If you are deciding whether a job needs the API or the app, ask the app:
I want to [describe the job]. Can I do this inside this app, or does it need API access
and some code? One line, then the simplest way to do it.I want a summary of my inbox every morning, plus the prompt above
It needs the API, plus a small script.
Simplest way: use a scheduled task in your chat app that reads your email, and only reach for the API if that app cannot do it.
Most jobs do not need the API. The ones that do run without you sitting there, and the Hermes guide is what that looks like end to end.
Common questions
Do I need an API to use AI?
What is an API key?
Is it cheaper than a subscription?
What to do next
Learn
What is an AI agent?
