So, what is an API key? API stands for Application Programming Interface, referring to a software interface through which two or more programs communicate. It’s also occasionally used as a blanket term to refer to standalone applications, particularly those found on smartphones. As such, an API key is an alphanumeric key generated for your account for that app or service that, when provided to someone else, allows them to use that app or service on your behalf.
In the case of ChatGPT, the API key is generated for your specific ChatGPT account, then provided to websites or separate apps that want to make use of ChatGPT’s features. Apps need your API key to use ChatGPT because without it they would need to pay for usage tokens themselves to access ChatGPT’s servers. By piggybacking off of your account, the app saves money, and you get to use ChatGPT through their service. It’s a win-win for everyone.