The Unsustainable AI Subsidy
Google, OpenAI, and Anthropic employ different AI pricing strategies. Google is the low-cost player, less than half the price of competitors despite increases. Anthropic maintained luxury pricing, while OpenAI initially subsidized then raised prices. These changes reflect the trade-off between market share and margins amid record capex spending.
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Key points
- Google Gemini 3.1 Pro: $2 input, $12 output per million tokens.
- Anthropic Claude Opus 4.7: $5 input, $25 output.
- OpenAI GPT-5.5: $5 input, $30 output.
- Pricing shifts from subsidies to margin improvement as capex hits records.
Why it matters
This matters because google Gemini 3.1 Pro: $2 input, $12 output per million tokens.
Technical impact
May affect model selection, inference cost, product capability, and evaluation benchmarks.
"Google\u0026rsquo;s AI triples in price each year.\nOpenAI\u0026rsquo;s flagship model was seemingly subsidized for a while, before rising again.\nAnthropic\u0026rsquo;s AI has been the same price for a little bit \u0026amp; decreased for the most powerful models.\nThose are three very different pricing strategies. If we compare the absolutes, the data completes the picture.\nVendor Model Input ($/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.\nThe pricing changes indicate changes in strategy : cuts when cash is plentiful \u0026amp; share matters. Increases when cash is tight \u0026amp; margins matter. The latter is the case for all three vendors now when capex spending continues to set records.\n"