Alphabet’s Google recently announced updates to its Gemini offerings of large language models, including new models with competitive pricing, in a bid to rival DeepSeek’s low-cost model.
“We’re making the updated Gemini 2.0 Flash generally available via the Gemini API in Google AI Studio and Vertex AI. Developers can now build production applications with 2.0 Flash. We’re also releasing an experimental version of Gemini 2.0 Pro, our best model yet for coding performance and complex prompts,” said Google in its latest statement.
2.0 Flash-Lite to rival DeepSeek’s low-cost model
Google is also releasing a new model, Gemini 2.0 Flash-Lite, its “most cost-efficient model yet”, in public preview in Google AI Studio and Vertex AI. The 2.0 Flash Thinking Experimental will also be available to Gemini app users in the model dropdown on desktop and mobile.
“We’ve gotten a lot of positive feedback on the price and speed of 1.5 Flash. We wanted to keep improving quality, while still maintaining cost and speed. So today, we’re introducing 2.0 Flash-Lite, a new model that has better quality than 1.5 Flash, at the same speed and cost. It outperforms 1.5 Flash on the majority of benchmarks,” stated Koray Kavukcuoglu, chief technology officer of Google’s DeepMind AI lab.
Similar to Gemini 2.0 Flash, it has a 1 million token context window and multimodal input. For example, it can generate a relevant one-line caption for around 40,000 unique photos, costing less than a dollar in Google AI Studio’s paid tier.
The cost of developing and using AI models has raised concerns among investors in recent weeks after DeepSeek revealed it spent less than $6 million on the final training run of its new AI model. Developers at leading U.S. firms heavily criticized this claim, saying that the total cost was likely magnitudes larger.
OpenAI launches o3-mini
Google was not the only tech giant to launch a new affordable AI model this week. OpenAI also introduced its latest reasoning model, o3-mini, marking a significant leap in the company’s mission to elevate artificial intelligence capabilities. This strategic launch aims to boost the company’s position in the market, particularly in light of DeepSeek’s R1 model.
DeepSeek’s release hit the global tech market and the overall U.S. stock market last week, prompting a loss of over $1 trillion in one day. Nvidia stock fell over 17 percent, wiping out approximately $593 billion in market value, marking the largest one-day loss for a company on Wall Street, according to LSEG data.
This disruption prompted OpenAI to respond quickly with the launch of o3-mini.
The pricing structure for o3-mini is competitive, set at $0.55 per million cached input tokens and $4.40 per million output tokens. This pricing is approximately 63 percent cheaper than o1-mini, making it an attractive option for developers and businesses looking to leverage advanced AI capabilities without incurring excessive costs.
