As companies' AI budgets hit millions of dollars, Google may finally have 'advantage' that the company has been working for 20-plus years

As AI companies race to build more powerful models, Google is increasingly focusing on a different selling point: lower costs. According to a Business Insider report, the company believes businesses can save significant amounts of money by using its latest Gemini 3.5 Flash model instead of relying entirely on the most advanced and expensive AI systems. The tech giant is positioning Gemini 3.5 Flash as a lower-cost alternative to frontier AI models while still delivering strong performance. “Companies are already blowing through their annual token budgets and it's only May,” Google CEO Sundar Pichai said recently.


“If companies used a mix of Flash and other frontier models they could save a lot of money,” he added.


According to Pichai, if major Google Cloud customers shifted 80% of their AI workloads to a combination of Gemini 3.5 Flash and other models, they could collectively save more than $1 billion per year.


The report said the timing is important because businesses are paying closer attention to AI spending as usage grows.

Google's advantage

Google may have an advantage because it controls much of its AI infrastructure, including chips, data centres, cloud services and AI models. Business Insider compared the situation to Google's rise in internet search, where speed, scale and lower costs helped the company outperform rivals.


Rather than competing only on building the most powerful AI models, Google is betting that businesses increasingly want AI that delivers useful results without generating massive bills.

Rising AI bills draw scrutiny

In its report, Business Insider noted that concerns about AI costs are spreading across the technology industry.


According to The Verge, Microsoft is reducing the use of Anthropic's Claude Code licenses for many employees, with cost reportedly being one factor behind the move. Meanwhile, Amazon has recently shut down an internal AI leaderboard after some employees increased AI usage to improve their rankings, leading to higher computing expenses. Uber's chief operating officer has also reportedly said AI costs are becoming harder to justify.


Dan Morgan, an analyst at Synovus Trust, told Business Insider: “As AI agents become more complex, long-running processes have become the norm.” “This has created sticker shock at many organizations,” he added.