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Google Introduces New Class of Cheap AI Models as Cost Concerns Intensify

Google has introduced new, cost-effective AI models under its Gemini family, responding to increasing competition and concerns over the escalating costs of artificial intelligence. The new offerings, including the “Flash-Lite” model, are designed to compete with cheaper AI models like DeepSeek’s, a Chinese rival that has drawn attention for its low-cost AI training.

The company unveiled several versions of its Gemini 2.0 models, which offer varying levels of performance and pricing. Among these is the “Gemini 2.0 Flash,” which was released to the general public after being previewed to developers in December. Flash-Lite, a more affordable variant, has been developed in response to positive feedback on the earlier Flash 1.5 model. However, the cost of Gemini 2.0 Flash is higher than its predecessor.

Google’s new pricing strategy comes amid growing scrutiny from investors over the rising expenses of AI model development. Recently, DeepSeek revealed it spent just $6 million on the final training run of one of its models, prompting comparisons to the significantly higher costs cited by major U.S. AI firms, including Alphabet, Microsoft, and Meta. Despite this, DeepSeek’s low-cost model has spurred competitors to accelerate their AI spending, leading to concerns about the long-term profitability of such investments.

Pricing for Gemini Flash-Lite is competitive, with certain inputs costing as little as $0.019 per 1 million tokens. This is cheaper than OpenAI’s flagship model, which costs $0.075 per million tokens, and slightly higher than DeepSeek’s $0.014 model (though DeepSeek’s pricing will rise fivefold on February 8).

These updates reflect Alphabet’s response to the growing pressure to provide affordable AI models while maintaining a competitive edge in the rapidly evolving AI space. However, despite these advancements, investor concerns remain about the sustainability of high capital expenditures in AI development.

 

Alphabet Plans Massive Capex Increase as Cloud Revenue Growth Slows

Alphabet (GOOGL.O) announced plans to spend $75 billion on its AI infrastructure in 2025, a 29% increase over Wall Street’s expectations. This announcement led to a 9% drop in Alphabet’s stock in after-hours trading as investors expressed disappointment with the company’s missed cloud revenue target and growing concerns over its profitability.

Alphabet’s planned capex for 2025 exceeds analysts’ expectations of $58 billion and marks a dramatic increase from the $52.5 billion spent in 2024. CEO Sundar Pichai defended this surge in investment, citing the enormous potential of the AI space and promising that the cost of AI technology would continue to decrease, making it more accessible. Despite this optimism, Alphabet reported a slowdown in its cloud revenue growth, which failed to meet projections.

The company’s cloud business saw a 30% rise in revenue, reaching $11.96 billion for the fourth quarter. However, this was a deceleration from the 35% growth in the previous quarter and missed the expected $12.16 billion. Pichai emphasized that the Gemini family of AI models would drive further growth within the cloud platform, noting that developer usage of Gemini had doubled in the last six months.

Alphabet’s capital spending is primarily focused on building servers and data centers to support its AI initiatives. The company’s cloud segment has faced heightened competition, especially from rivals like Microsoft and Amazon, with the latter set to release its quarterly results soon.

Meanwhile, Alphabet’s core advertising business, which represents around 75% of total revenue, showed positive performance, with ad revenue growing 10.6% to $72.46 billion in the fourth quarter. YouTube contributed significantly to this growth, with ad revenue increasing by 13.8%.

Alphabet’s overall revenue for the quarter rose 12% to $96.47 billion, surpassing analyst expectations, while profits came in at $2.15 per share, above the forecasted $2.13 per share.

 

Google Said to Be Developing Gesture-Based Gemini Live Shortcut for Android Devices

Google Developing Gesture-Based Shortcut for Gemini Live on Android Devices

Google is reportedly working on a new way to activate Gemini Live, an advanced two-way voice conversation feature on Android devices. Currently, users can only access this feature within the Gemini app, but Google is aiming to make it more accessible by integrating a gesture-based activation method. This change could significantly improve the user experience by providing a faster and more convenient way to initiate voice interactions with the AI, potentially boosting adoption rates for this feature.

Gemini Live’s New Gesture Shortcut

A recent report from Android Authority suggests that Google is preparing to introduce the new Gemini Live activation method in an upcoming update. The feature was discovered in the Google app version 16.2.39 during an APK teardown, although it is not yet functional in the current version of the app. This indicates that the feature is still in development and users will have to wait until it officially rolls out. Once available, the gesture-based shortcut could offer a quick, hands-free way to start a voice conversation with Gemini Live, making it more seamless for users.

Existing Activation Methods for Android Users

Currently, Android users can activate the Google Assistant using several different methods. The most common way is by saying “Hey Google” or “OK Google”, though this isn’t always convenient for users who may not want to use voice commands. Alternatively, users can long press the power button or tap the microphone icon in the Google Search widget. Another option is swiping diagonally from the bottom corners of the screen, or using a home screen shortcut icon. With the introduction of Gemini Live’s gesture shortcut, users could have even more ways to interact with the AI, further enhancing its accessibility.

Potential Impact of Gesture Activation

By introducing a gesture-based activation system, Google is likely aiming to make Gemini Live even more integrated into the user’s daily routine, without needing to open a specific app. This move could make it more competitive against other voice assistant technologies, as users look for more efficient and innovative ways to interact with their devices. If successfully implemented, this new shortcut could improve how Android users engage with their devices, offering a faster, more intuitive AI experience.