Unexpected Move: Google Cuts AI Plus Subscription Price and Doubles Storage

The price war in AI tools is beginning: Google has decided on its own initiative to lower the price of its AI Plus plan from 30 shekels to 19 shekels, and at the same time to double the cloud storage it includes. According to experts, this is an initial step toward a broader price reduction for a product that is becoming a basic consumer good. At the same time, it will limit the amount of credits available to subscribers, but it is not certain users will notice.

Yoni Afolt, mako Published: 10.06.26, 12:23 Gemini | Photo: mundissima, Shutterstock

We are already used to living in a world where everything keeps getting more expensive, including all our subscriptions to digital services like Netflix or Spotify. This is a familiar practice, making consumers addicted to a cheap and good product, even at a loss, and then gradually raising prices. Now Google has announced the opposite move, which may signal the beginning of a price war in AI. The company sent emails, including in Israel, about cutting the monthly price of the AI Plus subscription from $7.99 to $4.99, in Israel from 30 shekels to 19 shekels per month, and in annual pricing from 300 shekels to 190 shekels. At the same time, it doubled the storage included in the subscription from 200 gigabytes to 400 gigabytes, a move that could also pay off for subscribers who chose the Pro plan and do not really need more than 400 gigabytes.

However, Google wrote in an email to those consumers: "We are moving to a new formula for calculating quotas for credits in the Gemini app. This formula takes into account the complexity of prompts, the features used and the length of conversations. The quota resets every 5 hours until the weekly cap is reached. With an AI Plus subscription like yours, you can enjoy a usage quota that is 2 times larger compared with users without a subscription."

Google added: "We intend to launch this usage quota model in other products as well, starting with Flow and Antigravity. Although the benefits in your base plan will no longer include 200 AI credits every month, the new quota model we are launching will allow you to maintain the same user experience you are used to."

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Vikas Kansal, the product manager for Gemini AI subscriptions, wrote on X that the storage update will roll out to users in the coming days, some have already received it. AI Plus launched in January as the cheapest AI subscription on the market, and is intended for private users and students. The subscription includes video generation via Omni Flash, the Google Flow creation studio and the NotebookLM research assistant. Google also offers AI Pro and AI Ultra at higher prices, with more storage and credits for AI tools. In the past, the company also increased the storage of AI PRO subscriptions from 1 terabyte to 5 without an extra charge.

Does this mean consumers with the same subscription will now encounter a token limit? Possibly, but it is hard to know, and it depends on each person’s personal usage. If you are not a heavy user, you probably will not notice a difference. If you are a heavy user, you probably bought a more expensive subscription in the first place.

It should be noted that Google is perhaps the company for which it is easiest to lower prices. In the end, this is a huge tech corporation that lives off our data, the more subscriptions it has, the more information it has. Lowering the price can even be worthwhile if it succeeds in stealing customers from a rival. The price reduction is part of a price war that began in developing markets around the world. In August last year, OpenAI launched ChatGPT Go in India at about $4.60 per month, which in Israel costs about 25 shekels. In December, Google launched its own AI Plus subscription in India for less than $5.

Chi-Hua Chien, co-founder of the venture capital fund Goodwater Capital, told TechCrunch that the move marks the era of commoditization in AI infrastructure, the process by which a product or service that was once unique and complex becomes a basic off-the-shelf product. "If you look at the internet era, the infrastructure companies were Microsoft, Cisco, Oracle, Northern Telecom, Lucent, Akamai and Equinix," he said. "A lot of those companies survived for a while, but they are not worth much today."

According to him, in every major technological transition, infrastructure companies "undergo aggressive commoditization, because the end customer does not think, wait, is my traffic going through Cisco equipment? He thinks, how do I move my traffic as cheaply as possible?" Chien predicts that in the long term, companies such as OpenAI and Anthropic, as well as chip, energy and storage providers, will go through a similar process. Both OpenAI and Anthropic have recently filed confidential applications for stock market listings and are facing a major change in the nature of their businesses. Cheaper subscriptions could inflate their monthly user counts and, of course, affect the share price, and the price war over AI tools is expected to intensify as those companies are forced to prove their economic success.

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