The Unsustainable Subsidy (1 minute read)

# The Unsustainable Subsidy Source: [https://tomtunguz.com/ai-model-inflation](https://tomtunguz.com/ai-model-inflation) Google’s AI triples in price each year\. [](https://res.cloudinary.com/dzawgnnlr/image/upload/q_auto,f_auto/uhmruf896ftdcbh6wf8i) OpenAI’s flagship model was seemingly subsidized for a while, before rising again\. [](https://res.cloudinary.com/dzawgnnlr/image/upload/q_auto,f_auto/xwyhnjwzt5xeh5gnswnp) Anthropic’s AI has been the same price for a little bit & decreased for the most powerful models\. [](https://res.cloudinary.com/dzawgnnlr/image/upload/q_auto,f_auto/vdjjlu7siakf8b9qklqo) Those are three very different pricing strategies\. If we compare the absolutes, the data completes the picture\. VendorModelInput \($/1M\)Output \($/1M\)GoogleGemini 3\.1 Pro$2\.00$12\.00AnthropicClaude Opus 4\.7$5\.00$25\.00OpenAIGPT\-5\.5$5\.00$30\.00Google remains the low\-cost player, increasing the price on all its models but still less than half of the competition\. Anthropic had maintained a luxe pricing until late last year\. The pricing changes indicate changes in strategy : cuts when cash is plentiful & share matters\. Increases when cash is tight & margins matter\. The latter is the case for all three vendors now when capex spending continues to set records\. The 1\-minute read that turns tech data into strategic advantage\. Read by 150k\+ founders & operators\. GP at Theory Ventures\. Former Google PM\. Sharing data\-driven insights on AI, web3, & venture capital\. [Bloomberg](https://www.bloomberg.com/news/articles/2025-04-30/google-places-ads-inside-chatbot-conversations-with-ai-startups)•[WSJ](https://www.wsj.com/tech/tech-media-telecom-roundup-market-talk-f8f0355a)•[Economist](https://www.economist.com/business/2023/07/25/next-generation-googles-run-a-tighter-ship)