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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Story provenance
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Record
| Original publisher | Tomasz Tunguz |
| Canonical URL | https://tomtunguz.com/ai-model-inflation/ |
| Publication time | Fri, 22 May 2026 03:25:13 +0000 |
| Retrieval time | 2026-05-22T03:35:20.128Z |
| Last seen | 2026-05-22T03:35:20.128Z |
| Headline source | Publisher (no WeSearch rewrite) |
| Excerpt source | publisher body |
| Excerpt method | First ~120 words (~800 chars) of extracted publisher body, fair-use limited. |
| Summary | WeSearch · cerebras-chat (WeSearch summarizer) |
| Summary source text | contentText |
| Citation coverage | Summary is a WeSearch-generated derivative; primary citation is the original publisher URL. |
| Cluster | k96Fv7lYtnkI |
| Cluster logic | Grouped by semantic title/content similarity across sources within a rolling window. Same-publisher template collisions are excluded from coverage comparison. |
| Ranking reason | Story pages are not engagement-ranked. Hub feeds use recency, with optional source-diversified chronological ordering (cap consecutive stories per source). No personalized ranking. |
| Publisher visit | Yes — open original |
| Substitutes article? | No — link-out required for full text |
Rights status (four layers)
WeSearch handling by dimension
| Indexing | May the item be indexed (stored, ranked, made findable)? | Allowed |
| Snippet | May a short excerpt of the publisher's text be shown? | Allowed |
| AI summary | May WeSearch generate its own short summary of the article? | Limited |
| Retrieval / RAG | May the content be exposed for third-party retrieval-augmented generation? | Not asserted |
| Model training | May the content be used to train AI models? | Not asserted |
| Commercial reuse | May the content be reused commercially? | Not permitted |
Basis: Derived from the published RSS/Atom feed. Contact: [email protected]. Reviewed: 2026-07-24.
Opening excerpt (first ~120 words) tap to expand
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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