OpenAI to cut AI pricing amid growing competition from Anthropic: Report
OpenAI plans to significantly lower the prices of its AI offerings as it tries to win more customers from rival Anthropic, according to a report by The Wall Street Journal. The ChatGPT maker’s reported move comes at a time when both companies are looking to capture a larger share of enterprise customers ahead of their much-publicized IPOs.
The WSJ report, citing people familiar with the matter, said OpenAI wants to impose major cuts on the prices of tokens, units of data that AI companies use to measure and bill the use of their models.
OpenAI is reportedly taking action in anticipation of similar price cuts from Anthropic.
OpenAI CEO Sam Altman also recently admitted that the cost of using artificial intelligence has become a “big problem.”
“We continue to push this further with models. I think we’re going to have a lot of ways we can help people get more value with less spend,” Altman said.
However, the report adds that a drop in pricing could lead to eroding profit margins for both Anthropic and OpenAI. Notably, both AI startups are already losing billions of dollars due to the massive computing needs required to run AI models for tasks like processing queries and performing other functions.
OpenAI races to win enterprise users from Anthropic:
Reportedly, OpenAI aims to catch up with Anthropic in the race to win over enterprise users who are spending large amounts of money to improve workforce efficiency.
Anthropic’s revenue reportedly increased after the company launched Claude Code, an AI-powered coding tool that has gained significant market share among software engineers.
Meanwhile, OpenAI is working to develop its own AI coding assistant, Codex. A recent report from the Financial Times stated that OpenAI is working on a ChatGPT “super app” that combines AI agents, coding tools, and third-party services.
Companies pouring money into bringing AI to boost productivity:
The WSJ report noted that some companies spent so much money adding Anthropic’s AI to their systems that their leaders now have to rein in spending.
One famous example of this is when Uber CTO Praveen Neppali Naga told The Information that the company “went back to the drawing board” by exceeding its entire annual AI budget after spending it on the back of increased use of AI-powered coding tools like Claude Code.
Meanwhile, a recent report by Bloomberg stated that Uber has imposed spending limits on AI-powered tools used by employees, such as Claude Code and Cursosr. The company reportedly capped employee AI spending at $1,500 per month in tokens for each AI coding tool.
Moreover, Microsoft had recently asked employees to stop using Claude Code and instead switch to its own Github Copilot CLI, according to an internal memo cited by The Verge.
