Google announced a new version of its Gemini model, called Gemini 1.5 Flash, which is designed for speed and efficiency. It was initially priced lower than other similar models, including Google’s own Pro version. OpenAI then released a competing model, GPT-4o Mini, at an even lower price point. In response, Google reduced the price of its Gemini 1.5 Flash model by about 80%, making it nearly 50% cheaper than OpenAI’s mini model.
The updated Gemini 1.5 Flash model can understand and respond in over 100 languages and has provisioned throughput, allowing developers to scale their usage while knowing the costs upfront. However, it still lags behind GPT-4o Mini in terms of performance.
While the price reduction is beneficial for developers and large enterprises, it poses a significant challenge for smaller AI startups that compete with industry giants like Google and OpenAI. These startups may struggle to remain viable due to the intense competition and pressure to innovate and differentiate themselves.
Source: https://www.neowin.net/news/google-slashes-gemini-15-flash-prices-igniting-llm-price-war/