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Generative AI Price Wars: The Race to the Bottom or the Future of Affordable AI?
Generative AI, once a high-priced innovation accessible only to a select few, is rapidly becoming a commodity. Recent price cuts by tech giants Google and OpenAI signal a shift towards more affordable AI, but this trend raises questions about the long-term sustainability of these price reductions. In early August, Google slashed the input cost for its Gemini 1.5 Flash model by a staggering 78% and the output cost by 71%. Not to be outdone, OpenAI also lowered the input cost for GPT-4o by 50% and the output cost by a third. These reductions are part of a broader trend that’s reshaping the landscape of AI.
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