There are a lot more price drops, though.

From prices that were already losing services money.

If you aren't making a profit, lowering prices is only about trying to capture market share before you're forced to increase prices to remain solvent.

Not too long ago Google was a bit of a joke in AI and their offerings were uncompetitive. For a while a lot of their preview/beta models had a price of 0.00. They were literally giving it away for free to try to get people to consider their offerings when building solutions.

As they've become legitimately competitive they have moved towards the pricing of their competitors.

We have likely seen the cheapest prices already. Once we can’t function without them anymore - go as high as you can!

Hopefully we get more competition and someone willing to undercut the more expensive options

Entering the market and being competitive gets more difficult all the time. People want the best and fastest models - can you compete with trillion dollar datacenters?

You might be right, but there's plenty of deep pocketed companies who are still very excited to compete in this market.

It's more likely the shareholder zeitgeist will soon shift to demanding returns on the ungodly amounts already invested into AI.

By then comparable or even better models will easily run on edge.

So if they crank up the prices we could just switch to local and not get lured by bigger and bigger models, rag, Agentic, MCP driven tech as if all of that couldn't run locally either.

I am not as optimistic that locally run models will be able to compete anytime soon. And even if, the price to run them means you have to buy the compute/gear for a price that is likely equivalent to a lot of 'remote' tokens

The most meaningful models will run in the future on those trillion dollar data centers that are currently being build.

> By then comparable or even better models will easily run on edge.

What are you basing that on?

Presumably your goal is to extract some practical value from this and not just higher benchmark numbers. If you can get the functionality you need from last-gen, there's no point in paying for next-gen. YMMV.

Indeed that was the premise that we would be a step behind when running on edge. That's already the case.

You know that competition is a thing, do you?

"will be too cheap to meter" means we're definitely metering it now.

No way. AI pricing is going up because people are willing to pay for it.

Just google. They were behind. So they just dumped their prices to get a foot in the door. Now they are popular and can raise it to market prices.

I still don’t think there’s any real stickiness to using a Google model over any other model, with things like openrouter. So maybe for brand recognition alone.

Yea, but brand have some stickiness. Maybe not for the absolute nerds but lots of people just stick to what they are already using. Look at all the people just using ChatGPT because that is what they tried first.

True, but that’s a website, of which the set of them come with bespoke features. I’d assume someone who adopted the API knows it’s easier to switch because it’s an open standard.