And some model updates.
OpenAI has launched its most expensive artificial intelligence model to date, named o1-pro, which is now available in the developer API. This new model is designed to provide consistently better responses by utilizing more computing power than its predecessor, o1. Currently, it is accessible only to select developers who have spent a minimum of five dollars on OpenAI API services. The pricing for o1-pro is significantly higher, costing one hundred fifty dollars per million tokens for input and six hundred dollars for generated tokens, making it twice the price of the previous model, GPT-4.5, and ten times the cost of the regular o1. Despite the high cost, OpenAI believes that the improved performance will attract developers. However, early reviews have been lukewarm, with users noting difficulties in solving Sudoku puzzles and understanding simple optical illusion jokes. Internal benchmarks from late last year indicated that o1-pro only slightly outperformed the standard o1 in coding and math problems, although it did provide more reliable answers.
Baidu has launched two new artificial intelligence models in a bid to compete with the rapidly rising DeepSeek. The company introduced Ernie 4.5 and Ernie X1, with Ernie X1 claiming to deliver performance comparable to DeepSeek’s R1 model at half the cost. Baidu plans to offer Ernie X1 to app developers for as low as 2 yuan, or approximately 28 cents, for every one million tokens input, and 8 yuan for output. The company’s chatbot app, Ernie Bot, will allow users to access both Ernie 4.5 and Ernie X1 free of charge. Despite being the first major Chinese firm to launch its own AI model in early 2023, Baidu faces stiff competition from DeepSeek, ByteDance, and Alibaba.
Amazon Web Services has launched its Amazon Q Business platform in Europe, specifically in Dublin, responding to significant demand from European customers who value data sovereignty. The platform, which allows staff to find internal data sources more effectively, will now operate entirely within the region, enhancing regulatory compliance and performance. David Pessis, the director of worldwide go-to-market for Amazon Q, emphasized that many customers prefer regional support and the security of keeping their data within Europe. In a related survey, fifty-one percent of UK organizations consider data sovereignty a crucial part of their data management strategy, highlighting the growing focus on sovereign services across the continent. AWS plans to aggressively invest in expanding its European data centers, with a notable €7.8 billion investment announced in May 2024 for establishing a sovereign cloud infrastructure in Germany.
Why do we care?
The key theme across these updates is AI specialization and regionalization—models are becoming more targeted in performance, pricing, and geography, rather than one-size-fits-all solutions. AI pricing is diverging—from OpenAI’s premium pricing to Baidu’s ultra-cheap models. Businesses must choose wisely, balancing capability with cost-efficiency. AI optimization will be critical—The real winners won’t just be those who deploy AI, but those who do it efficiently.
