ChatGPT maker OpenAI, has announced some of the most significant price cuts in the company’s history, as it looks to pounce on the more larger market share acquired by rivals Anthropic and Google. The company has reduced prices on its smaller models by as much as 80% as it looks to attract more business clients.
Companies globally, though did spend heavy during the AI rush, have now started to rein down on costs on scrutinise some of the more excessive AI spends. That trend, along with recent market reactions to what experts are calling an ‘AI Bubble’, are some of the prime reasons for OpenAI to announce such significant cuts.
In terms of price cuts, the ChatGPT maker lowered the cost of its smaller GPT-5.6 Luna model by 80% and its mid-tier Terra by 20%, while leaving the price of its biggest and flagship Sol model unchanged.
While business demands and market trends are two reasons, intense competiton from much cheaper and materially effective Chinese rivals isn’t making things easier for not just OpenAI, but Anthropic as well. And even though the latter is the more dominant one when it comes to core enterprise use, Chinese models from DeepSeek and others are forcing a rethink at American AI companies.
The new pricing means businesses using OpenAI’s technology will have to pay less for every million “tokens”, or the units used to measure AI usage, they run through the models.
Sending text to Luna now costs just 20 cents per million tokens, from the high of $1 while Terra’s reduced to $2 from $2.50. For both, generating responses falls to $1.20 and $12 from $6 and $15, respectively.