OpenAI considers drastic price cuts, anticipating war for users with Anthropic: Report

In what could eventually become a hotly contested price war, OpenAI is considering slashing prices of the AI offerings as it prepares for its public market debut, according to a WSJ report.


"The company is weighing significant cuts to what it charges for tokens, the unit of measurement artificial-intelligence firms use to bill for their products," the WSJ report said.


The price cut by OpenAI could be in anticipation of a similar move that Anthropic is likely considering, the report added. Both companies are fiercely competing with each other to get a larger share of the enterprise AI market. Anthropic's Claude has made headways for its enterprise AI offerings and the company is looking to double its revenue to $10.9 billion in the second quarter from $4.8 billion in the first quarter.

Both OpenAI and Anthropic are also vying to get a greater share of the coding market and win the confidence of software engineers with their respective offerings Claude Code and Codex, respectively.

Anthropic recently surpassed OpenAI in terms of valuation as the Claude-maker raised USD65 billion in Series H funding in May at $965 billion. OpenAI was last valued at $852 billion in March.

Both companies have raised the stakes in the tough AI battle amid global corporations adopting agentic AI tools to increase productivity. The price cut could further crimp margins for these companies that are already burning dollars for massive compute capacity to train their AI models.

Another major AI player SpaceX will list on Nasdaq on Friday. The Elon Musk-owned company has fixed the IPO price at $135 per share eyeing a valuation of $1.75 trillion. A blockbuster listing could catapult the Tesla owner to become the world's first trillionaire.

Big AI players are pouring in billions of dollars to ramp up capacities anticipating a boom in AI demand. Major hyperscalers like Amazon AWS and Google-parent Alphabet are raising funds to ramp up their compute capacities.