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    Google launches ‘Cheap AI’ to Combat Rising Costs & Chinese Competition

    AdarshBy No Comments4 Mins Read

    Alphabet’s Google has announced updates to its Gemini family of LLMs that includes a new product line with affordable pricing…

    There is no disputing the fact that Artificial Intelligence makes life a whole lot easier but one has to admit that it comes at a price! As more and more powerful AI tools continue to get built, the cost of developing and running these models is racking up too.

    In a bid to solve this, Google has expanded its Gemini AI family by launching a series of models that are cost effective. This includes the latest Flash-Lite model as well.

    But this isn’t just a step to make AI more accessible – this is also a response to mounting competition, especially the Chinese version DeepSeek which has been in the news for its budget friendly models.

    Why AI Costs are a Concern

    Considering all the computing that AI models perform, it racks up a huge bill. This means that training large scale systems like Google’s Gemini and OpenAI’s GPT requires expensive hardware, vast datasets and continuous innovation.

    For small business that are looking to integrate AI into their systems, this comes at a cost that does not fit their budget. Hence, start ups and developers struggle to access high-end AI models.

    This is the problem that Google is looking to address – by creating cheaper AI alternatives without compromising too much on performance.

    The DeepSeek Intervention

    In recent weeks, Chinese entrepreneur Liang Wenfeng has shaken up the global Artificial Intelligence landscape with his language and reasoning model, DeepSeek-R1.

    After DeepSeek revealed that it spent less than $6 million on the final training run of a model, the actual cost to develop AI models as well as the cost incurred to use them have come under investor scrutiny.

    Developers at leading American AI firms however continue to insist that the total cost that went into developing DeepSeek was definitely much larger. But Wenfeng’s claims have raised questions on Alphabet and its rivals Microsoft and Meta and their earnings.

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    Gemini AI and the new Flash-Lite model

    Google’s Gemini AI is useful for a range of activities from chatbots and search engines to creative writing and business automation. Up until now, Google offered a lighter version called Flash to those who did not need all the abilities of its powerful models.

    But in a direct response to cut costs and make AI models more affordable and accessible, Gemini has launched Flash-Lite. This is a bid to ensure that business of all sizes and budgets can integrate the company’s AI models into their applications.

    This is direct response to DeepSeek’s offerings as Google is aware of losing businesses to high-quality AI that is available for lower prices elsewhere.

    Gemini Flash vs Flash Lite

    What this means for Consumers

    Google’s decision to lower prices and offer cheaper alternatives will change the way AI models are perceived and integrated across sectors.

    For starters, this will allow small businesses to integrate AI models into their chatbots, assistants and automation features at much lower costs. It will also force Google’s rivals like OpenAI and Meta to lower their own pricing models.

    Last but not least, non-cooperate sectors like education and healthcare can also seamlessly integrate AI systems into their channels at affordable rates.

    Image Courtesy

    The Last Word

    DeepSeek’s appearance has shaken up the entire AI industry. With its competitive pricing, it has forced the big players to reconsider their pricing. Google has been the first to understand the consequences and has made its move by launching Flash-Lite. The onus is now on the others to follow suit or risk losing a considerable slice of the market.

    This is definitely good news for small businesses and individual consumers. AI models are now affordable and accessible and will soon be more integrated in everyday life.

    Affordable AI is definitely the future and is here to stay!

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    Adarsh hates personal bios, Chelsea football club and Oxford commas. When he's not writing, he's busy playing FIFA on his PlayStation.

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