AI Model Inflation: The Unsustainable Subsidy
The article discusses the rising costs of AI models from major vendors like Google, OpenAI, and Anthropic. It highlights the different pricing strategies employed by these companies, with Google maintaining the lowest prices despite annual increases. The article suggests that pricing changes reflect broader market conditions and strategic shifts among the vendors.
- ▪Google's AI models have tripled in price each year, yet they remain the lowest cost option.
- ▪OpenAI's flagship model experienced a subsidy period before its prices rose again.
- ▪Anthropic's AI pricing has been stable but recently decreased for its most powerful models.
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The Unsustainable Subsidy May 20, 2026 AI Google’s AI triples in price each year. OpenAI’s flagship model was seemingly subsidized for a while, before rising again. Anthropic’s AI has been the same price for a little bit & decreased for the most powerful models. Those are three very different pricing strategies. If we compare the absolutes, the data completes the picture. Vendor Model Input ($/1M) Output ($/1M) Google Gemini 3.1 Pro $2.00 $12.00 Anthropic Claude Opus 4.7 $5.00 $25.00 OpenAI GPT-5.5 $5.00 $30.00 Google remains the low-cost player, increasing the price on all its models but still less than half of the competition. Anthropic had maintained a luxe pricing until late last year. The pricing changes indicate changes in strategy : cuts when cash is plentiful & share matters.
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Excerpt limited to ~120 words for fair-use compliance. The full article is at Tomasz Tunguz.
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