Google's Gemini 3.5 Flash Marks End of Affordable AI Era
Google's Gemini 3.5 Flash costs 3x the model it replaced, and the era of cheap AI is ending
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Google's newly released Gemini 3.5 Flash model costs significantly more than its predecessor, signaling a shift in the AI pricing landscape. The price for input tokens has increased from $0.50 to $1.50, while output tokens rose from $3 to $9, indicating the end of subsidized AI. Other companies, including OpenAI and Anthropic, are also raising prices, reflecting a broader industry trend.
- 01Gemini 3.5 Flash's pricing has risen to $1.50 per million input tokens and $9 per million output tokens, tripling costs compared to the previous model.
- 02The increase in prices across the AI industry is not due to rising operational costs but rather a strategic move by companies to test customer price tolerance.
- 03DeepSeek, a competitor, has reduced its prices significantly, offering its V4-Pro model at $0.44 per million input tokens, highlighting a split in the market.
- 04AI companies are shifting from subsidized pricing models to more sustainable pricing strategies as they face pressure from investors for profitability.
- 05The trend of increasing prices is affecting both enterprise-level models and consumer subscriptions, with services like ChatGPT Plus and Claude Pro also seeing tighter usage limits.
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The release of Google's Gemini 3.5 Flash on May 19 has marked a significant shift in AI pricing, with costs rising sharply from its predecessor, Gemini 3 Flash. The new model charges $1.50 per million input tokens and $9 per million output tokens, tripling the previous prices. This change signifies the end of the subsidized AI era, as major companies like OpenAI and Anthropic also raise their prices. Despite operational costs for AI models decreasing, companies are opting to retain the savings rather than pass them on to consumers, indicating a strategy to maximize revenue. In contrast, DeepSeek has reduced its prices significantly, offering its models at a fraction of the cost of competitors, which could reshape market dynamics. This trend of increasing prices is not limited to enterprise models but extends to consumer subscriptions, where users are experiencing tighter usage limits and higher costs.
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The rising costs of AI models could lead to increased expenses for businesses relying on these tools, affecting their operational budgets.
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