Two of the most hyped private firms on earth are getting ready to go public. OpenAI and Anthropic have both quietly filed for an IPO.
They are walking toward the stock market at an awkward time. The price of AI is starting to drop.
Google just made that hard to ignore.
Google Cut Its AI Plan To Five Bucks
On Monday, Google dropped its entry plan, Google AI Plus, from $7.99 to $4.99 a month. It also doubled the storage to 400GB.
That makes it the cheapest paid AI plan in the US, as TechCrunch reported.
Google AI Plus first launched in January. It was aimed at students and everyday users, not big firms.
The plan isn't bare-bones either. It comes with video tools, Google's Flow design app, and its NotebookLM research helper.
Need more power? Google still sells its pricier Pro and Ultra plans on top.
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The Bigger Story Is Pricing Power
Until now, US AI firms barely fought on price. That is starting to change.
Investor Chi-Hua Chien of Goodwater Capital calls this the commodity era for AI. A commodity is a product so common that buyers pick on price alone.
His example is the early web. Plumbing firms like Cisco and Lucent were huge for a while, then faded once their gear became a commodity.
Think Oracle and Equinix too. A few lasted, but most aren't worth much today.
Buyers didn't care whose wires moved their data. They just wanted it cheap.
Price wars are great for users. They are brutal for profit margins.
It is one of the clearest market disruptors investors are watching this year.
Why It Matters For The IPOs
Chien thinks the same fate hits AI's plumbing. And he puts OpenAI and Anthropic in that group.
The price war already started overseas. OpenAI launched a roughly $4.60 plan in India last year.
Google soon followed there with its own plan under $5. Now that fight has crossed into the US.
Google has edges the startups don't. It bundles AI into apps people already use, and it makes its own chips.
A cheap plan also pulls in new users fast. Scale is its own kind of moat.
Watching where smart money lands next is half the game.
What To Watch
Anthropic still hasn't launched a budget plan anywhere. That gets harder to hold each time a rival cuts prices.
For investors eyeing those IPOs, the question is simple. Can a firm charge a premium for something that gets cheaper by the month?
Cheaper AI is good news for your wallet. It is harder news for AI stocks.
Google just made that question a lot louder.
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