OpenAI Considering "Steep" Price Cuts To Compete With Anthropic

Amidst the euphoria generated by SpaceX's IPO yesterday, which apparently suggests to many that there is nowhere to go but up for AI, the two real AI leaders - OpenAI and Anthropic - who are also planning for stratospheric IPOs, are locked in brutal competition. And that is heightened by growing reluctance on the part of corporate customers to continue to pay eye-watering sums for AI access. 

As a result, OpenAI is actively contemplating significant price cuts to keep customers because it thinks Anthropic will do the same. As a general rule of economics, and even of tech, this does not bode well for hockey stick financial projections on which the two firms' valuations are currently based. Just sayin'. JL

Cris Tolomia reports in Quartz:

OpenAI is considering significant price cuts to its AI services as it looks to pull customers away from rival Anthropic. Tokens are among the areas where OpenAI is considering charging less, driven partly by expectations that Anthropic will pursue its own reductions. OpenAI CEO Sam Altman has acknowledged pricing pressure from business customers "a huge issue." Business leaders have grown increasingly reluctant to authorize large AI spending. Steep discounting would put additional pressure on two businesses that are already deep in the red, given the massive infrastructure expenditures involved in powering AI systems at scale even as both companies prepare for IPOs.

OpenAI is considering significant price cuts to its AI services as it looks to pull customers away from rival Anthropic, 

Tokens — the standard unit AI companies use to meter and price their services — are among the areas where OpenAI is considering charging less, driven partly by expectations that Anthropic will pursue its own reductions.

 

OpenAI CEO Sam Altman has acknowledged pricing pressure from business customers. "I think we'll have a lot of ways we can help people get more value for less spend," Altman said at a recent event. He called costs "a huge issue."

Steep discounting would put additional pressure on two businesses that are already deep in the red, given the massive infrastructure expenditures involved in powering AI systems at scale. The outlet also noted that business leaders have grown increasingly reluctant to authorize large AI spending, with some companies having already maxed out their budgets for AI tools.

The potential cuts come as competition between the two companies has intensified. Anthropic's revenue has risen after its coding tool Claude Code gained traction among software engineers, and the company closed a $65 billion Series H funding round at a $965 billion valuation in May, surpassing OpenAI's $852 billion valuation for the first time. OpenAI has since made its own coding tool, Codex, a priority.

The pricing deliberations come as both companies prepare for public listings. OpenAI submitted a confidential S-1 filing with the Securities and Exchange Commission earlier this week, with Goldman Sachs $GS +2.62% and Morgan Stanley $MS +0.65% leading the process ahead of a potential fall debut. Anthropic submitted its own confidential IPO prospectus a week prior.

The Journal noted that a key risk investors have identified for both companies is how interchangeable their products are — and how easily customers can switch between them. A price war would test both business models ahead of those listings.

For consumers, GPT-5.5 access through OpenAI runs $8, $20, or $100-plus per month depending on the tier chosen. On the Anthropic side, Claude Pro carries a $17 monthly price tag under an annual plan, while Claude Max starts at $100 a month, CNBC noted.