The max_tokens parameter in the GPT-3.5 API is optional. If set, it limits the response to that number of tokens. If not set, the limit is the model’s max capacity (4096 tokens for GPT-3.5 Turbo) minus the tokens used in the prompt. The max_tokens serves as a hard cap, truncating the response if the limit is reached. To utilize the maximum tokens available, you’d need to calculate the remaining tokens based on the tokens used in your prompt.