Google Unveils Cost-Effective Gemini AI Models Amid Competitive Scrutiny

Google has updated its Gemini AI models to compete with low-cost rivals. The new offerings include a cheaper Flash-Lite version following positive feedback on previous iterations. The cost of AI models has become a significant concern for investors, affecting Alphabet's stock performance after announced capital expenditure hikes.

Alphabet's Google has launched updates to its Gemini series of large language models, introducing a new line aimed at competitive pricing against affordable options such as DeepSeek from China. Among the latest introductions by the tech giant are budget-friendly variants, notably the 'Flash-Lite' model, designed to reduce user costs significantly.

The latest releases include Gemini 2.0 Flash, which has been made widely available after initial developer previews. Google's deployment of Flash-Lite, along with a new version of its premium 'Pro' model, has sent ripples throughout the industry as financial scrutiny intensifies over AI development costs.

While Flash-Lite's pricing stands at an attractive $0.019 per 1 million tokens, rising costs across the industry and increased capital investments pose challenges for tech giants. Alphabet's focus on substantial expenditure in AI seeks to maintain its edge, even as investor concerns over costs have affected its share value.

(With inputs from agencies.)