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OpenAI mulls slashing prices as it competes with Anthropic for users
- anonym00se1 3mo agoHow does OpenAI plan to be profitable?
- jillesvangurp 3mo agoEconomies of scale, optimization of models, hardware, energy infrastructure, data center construction and operation, etc. Stuff is currently relatively inefficient and there's lots of room for optimization. All the usual stuff.
- lelanthran 3mo ago> Economies of scale, "We lose money on every customer, but we'll make it up in volume" :-)
- senectus1 3mo agoLast man standing monopoly.
- Hamuko 3mo agoIs that even the plan, or is the plan to make a huge IPO while there's still hype and run off with the money?
- dgellow 3mo agoRunning off with money to be burned by your infra is a pretty terrible plan
- testfrequency 3mo agoAds of course
- ian-clark 3mo agoSurveillance, user data, government contracts, military technology, and ads. I don’t actually know this, just guessing based off other big companies and what they’ve done with the current government.
- outside1234 3mo agoIs OpenAI bankrupt yet?
- declan_roberts 3mo agoYou and I like Claude because it's the best for coding but the normies love chatGPT. ChatGPT has a huge market target.
- pixel_popping 3mo agoMaybe stop the "news" for a bit?
- glaucon 3mo agoWasn't this move meant to be delayed until after the IPO?
- seydor 3mo agoi wonder what % of Anthropic's subscriptions is annual vs monthly
- irjustin 3mo agoWe run monthly. It seems like every few months there's a reason to swap in/out of a particular vendor. Specifically I use all 3 pro then either chat or claude will have a 5x max depending if they're the good thing to be using during that those 3 months.
- Overpower0416 3mo agoThis pre-IPO battle is very entertaining. Curious how it all ends
- nelsonic 3mo agoBankruptcy? How much longer can they sell a dollar for 50c?
- tty456 3mo agoHow long did AMZN do it for?
- ses1984 3mo agoI don’t think Amazon did that…?
- LoganDark 3mo agoAmazon would absolutely take a loss on certain products in order to dominate the category, squeeze out competitors and then bring the price back up. It's one of the reasons they're so dominant in general now. Also one of the reasons why Amazon Basics has basically everything that exists and they're usually at or near the top of their respective categories -- third-party sellers simply can't compete.
- Haven880 3mo agoTo a certain extent, but not completely. OpenAI and Anthropic are taking losses on their entire offering—that is a huge difference. Amazon, for example, has pumped its profits back into R&D for decades. What AI companies are doing right now is running the Uber playbook on an epic scale. In the US, there isn't much competition, so they can maintain a duopoly. But look at what happened in China: Uber collapsed and pulled out. Now, the entire world is facing competition from DeepSeek and Qwen at a fraction of the cost. According to a reliable Shenzhen source, they will halve their prices again by the end of this year using newer Huawei GPUs. The current 7nm chips are already bleeding OpenAI dry. By the end of this year, they will upgrade to 5nm, and by June of next year, 3nm. They don't even have to be better—just 95% as good at 1/20th of the price. I don't see OpenAI and Anthropic surviving much outside of America; they are likely staring down Groupon’s fate. You can research it yourself: China has no issues with electricity because they have a massive power surplus. This is why OpenAI and Anthropic are so scared right now. They must IPO by 2027, because after that, they will suffer the exact same fate as Groupon.
- jb_briant 3mo agoIt's all speculation. Reality is Fable is x2 price increase against previous. GPT5.5 is x2 price increase against previous. And after the last week reset, codex is hungry for your sub allowance. Everybody can see that the massive raises are not matching the revenue, at all. It's a surprising headline. Yes it does make sense to cut the price to gain market share, but it also make sense to keep it at a sustainable level, which seems to not have been reached yet.
- andai 3mo agoFable is twice the size of Opus from what I gathered. So I'm not sure if 2x price translates to 2x profits as well. Not sure about GPT but it seems plausible they've also been increasing the model size with recent releases. (Progressively training a bigger model and easing into a profitable price range for that model scale?)
- thewhitetulip 3mo agoOpus 4.8 cost 2x than 4.7 But to compensate for that Claude Code limits wete doubled This was a week after deepseek slashed prices!
- WhitneyLand 3mo agoThe frontier labs commonly trade spots at the top of the benchmarks with each new model release. The timing of these price cut discussions says to me OpenAI has no imminent release that will be edging out Mythos/Fable. If so the question becomes when can they do so, or is this possibly a turning point where Anthropic keeps the crown to themselves for the foreseeable future.
- stingraycharles 3mo agoIt seems that OpenAI lacks a clear target audience, they try to be everything for everyone. Anthropic is targeting professionals / enterprise users. I don’t fully understand why OpenAI lacks this focus, as clearly identifying a target market is one of the first things you do with a business strategy. But instead they just seem to throw stuff against the wall and see what sticks.
- kennywinker 3mo agoThey keep asking chatgpt how to monetize and it keeps giving slop answers?
- jillesvangurp 3mo agoI think this is too simplistic. Codex is increasingly useful for business usage. I use it for both technical stuff and doing non technical things with my inbox, google drive, etc. It's pretty good for that. And it's pretty clear that business users are very much untapped potential at this point. They need proper agents with tunable guard rails and all the rest. It seems very competent at coding tasks as well. I don't think Anthropic has a huge edge on that front. It's more of a neck and neck race with proponents in both camps. I ignore most benchmarks at this point; I don't think they have much relevance for normal users. I think it's actually necessary for both to try out different approaches. Nothing is set in stone yet when it comes to the UX of these things.
- broodbucket 3mo agoThey have the consumer market but want the enterprise market, because it's a lot more lucrative, so they're probably going to just keep chasing that even though there's no signs they'll stop losing to Anthropic. They don't need to do that much to keep the consumer market because of momentum.
- andrewstuart 3mo agoNothing to do with price. Claude actually works - unless OpenAI can do that it would make no difference if it was free. It works unbelievably well actually - it’s truly amazing.
- GaggiX 3mo agoCodex also works, before Opus 4.8 and Fable it wasn't very clear who had the best agentic model.
- tailscaler2026 3mo agoOpenAI is full of Trump/MAGA supporters and actively encourages using AI to kill people. More than happy to watch them lose the global consumer market while they compete with Palantir for DoD contracts.
- dannyw 3mo agoCompetition is lovely. And ironically, OpenAI will probably get and keep lots of enterprise customers like Microsoft^ that won’t accept anything less of ZDR. [1] https://www.theverge.com/report/947575/microsoft-claude-fable-5-restricted-internally https://www.theverge.com/report/947575/microsoft-claude-fabl...
- olmo23 3mo agoZDR = Zero Data Retention
- sghiassy 3mo agoNo moat! Think about where any of them will be in 20 years On device AI?
- arjie 3mo agoI’d upgrade ChatGPT for the family but I have them in an enterprise plan so I can distribute custom GPTs easily and that’s incompatible. Ah well.
- istvan0 3mo agoThey cut prices and get more customers who are going to move to the next vendor that cuts prices even more or when they jack up the prices again. I am not complaining, I like my investor subsidised tokens, I don't see what these companies see as their end goal when it's becoming more and more possible to run a competent LLM locally(even with today's RAM prices). I am surprised that there is no Claude or ChatGPT machine that I could buy, I feel like they should be opening up that model, but I guess subscriptions look better on balance sheets.
- xyzal 3mo agoI think it is time to start shorting.
- Uptrenda 3mo agoToo bad codex still sucks. Anthropic could double their prices tomorrow and I'd probably still pay it.
- mentalgear 3mo agoAnd openAI's discounts are not enforcing that it is a quality product.
- byzantinegene 3mo agoyou're not a corporation, corporations are price-sensitive and the decision-makers are typically not the end-users.
- bob1029 3mo agoI have a really strong suspicion that there is something different about OAI prepaid tokens in the API vs elsewhere. I've been able to get away with spending less than $150/m on average while many peers are hitting 10x that. I am curious how many on HN have manually configured their copilot install with a custom OAI token for 5.4/5.5. In my experience, the performance difference over the built in subscription models is immense. This setup tends to solve the problem so quickly and reliably that any desire to have it run while I'm asleep seems absolutely ridiculous. The performance is constant throughout the day and week. I think what might be happening is that we are chasing the cost optimization rabbit a little bit too hard. Capability is weird dimension to quantify. A weaker model is not weaker in a linear way. It's usually this incredibly tall brick wall of a discrete go/no-go. If the model can't do the task, it doesn't matter how cheap the tokens are. Something approaching the inverse is also largely true. Focus on the capability (is this giving my customer what they want) instead of the cost, and you will likely find that the cost never reaches a threshold where you even begin to worry about it. Starting from a position of cost optimization tends to spiral into a dark place.
- throawayonthe 3mo ago> any desire to have it run while I'm asleep seems absolutely ridiculous. could that be the difference from your peers? :p (real question b/c if you brought it up you're probably seeing others do it)
- bob1029 3mo agoThe point I'm trying to make is the reason a lot of people are resorting to the 24/7 Ralph loops is because they're using weaker models that need an incredible number of attempts to make any progress. The Death Star has different game theoretic implications. You probably don't need it to be lasering entire planets while you sleep, assuming the laser system actually works as advertised. I've never had a copilot run that took so long that I had to get up from my PC. Maybe 10 minutes. What the hell can run for 24 hours and still converge in a meaningful way?
- mentalgear 3mo agoI haven't used OpenAI for months since them supporting the warmongers officially, and I have to say not only don't I miss them - I barely think about them expect for their "please come back" emails from my account I haven't deleted yet unfortunately.
- rich_sasha 3mo agoLots of comparisons to eg. Amazon, and how both were burning money for ages. Maybe the better comparison is Uber? I.e. a commoditised product (taxis on an app), burning money to directly subsidise and gain market share. I always thought it was utterly insane and a waste of money... But you'd be hard pressed to have not made money on Uber. This is my understanding anyway. A LLM-generated summary suggests that anyone who invested pre-IPO got at least 8-10% annually compounded. Even Series G investors made 2.3x since then. It's not an Eldorado and has to make up for all the losers in the VC portfolio but it's money made, not a smouldering crater of losses. And after going public, return from IPO is 9.4% compounded. Price is 40% below all time high in October 25 but hey that's a harsh criterion for a long term investment. The reason why I think it's a good point of comparison is that there's no moat, plenty of competition, heavily subsidised for years by literally burning cash, now seemingly profitable and a reasonably sane PE ratio of 17. Of course one difference is that a major cost item for LLM companies is building genuinely new, cutting edge engineering/science products whereas for Uber, I never understood why they need the 1000s of technical staff to deliver a taxi app. I don't know about the ins and outs of the business models of either LLM providers or Uber but keen to hear from people who have insights.
- grebc 3mo agoIt’s all about the equity. Not sure why people are talking about revenue and profits. Sam & co are about to make ridiculous bank.
- m4rtink 3mo agoYes, please, do it, slash the prices, ideally to zero, immediately! That way you will loose money even faster and we can finally get ridd of this nonsense even sooner.
- dlcarrier 3mo agoLLMs are quickly becoming a commodity. In a decade, the only reason anyone won't be running free models locally will be for corporate oversight or regulatory needs, so the successful providers won't be the ones that make the best product, but the ones that make the most compliant product.
- cmiles8 3mo agoThis is the race to the bottom setup that will tank these companies in their attempts to IPO. They’re burning cash at current pricing and if a true price war breaks out the only way that ends is if either OpenAI or Anthropic blows up and goes away. Right now OpenAI is looking like the one setup to fail here. They have lost momentum big time and are looking incredibly vunerable.
- daft_pink 3mo agoOpenAI seems like such a better product these days. I was someone who jumped to anthropic early on for claude code, but I find myself jumping in the other direction these days. I completely don’t understand Anthropic’s pricing where you have to pay a monthly fee to access their crappy models and pay per use for access to their top model. If you’re going to go pay per use it should be actually pay per use.
- sireat 3mo agoAs long as Codex remains so affordable and useful they do not have to slash prices, just keep Codex usable. I keep meaning to try Claude Code, but I can't seem to run out of limits on Codex on regular pro plan. Meanwhile all my friends on Claude Code are fighting the token limits every few hours. I even switched to using extra high for easy medium level script tasks as a test and besides taking longer there was not much reduction in the token allowance. I generally write a detailed spec before plan then possibly iterate a bit before implementation. Not sure what I am doing "wrong".
- SwellJoe 3mo agoI literally never hit usage limits in Claude Code on the $100 plan, and I feel like I'm using it as heavily as I can while still producing useful software. I could certainly make thinky machine go burr by giving it more busy work, but it wouldn't be good code or code that needs to exist. And, I even use `claude -p` pretty regularly for scripted stuff (automated security vulnerability searches), which I thought was now counted at regular API rates, but that doesn't seem to ever run out either. I do only run one at a time, though...not parallel, so maybe it doesn't kick over into some "automation" mode of counting usage, I dunno.
- crystalPalace 3mo agoI agree, anecdotally I've only hit any usage limits on the $100 Max plan in the past couple of days using Fable 5. Evaluating old codebases eats a lot of tokens. But before Fable 5 I was running Opus 4.8 on max effort most of the day and rarely getting close to 50% usage. I rarely run dynamic workflows and sub-agents though.
- ramraj07 3mo agoI regularly hit usage limits on CC but thats when im in the zone, and do 5 things in parallel. Thats like 5 hours a week. I also hit limits if I do something important, at which point I make it do a loop with significant subagent counts to just review and adjust the code extensively using a bunch of frameworks. Im perfectly happy with the CC limits of a max plan, it is never something that blocks me.and when it runs out im brain fried as well anyway so thats not an issue.
- IAmGraydon 3mo agoOAI is trying to lure Anthropic into a war they know Anthropic can’t fight - a war of who can burn more cash.
- usernamed7 3mo agoSlashing prices is only going to go so far...you couldn't pay me to use chatGPT or codex. I used chatGPT for a long time but once i switched to anthropic i could sense a higher quality and a lot less frustration and correction on my part.
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- dennysora-main 3mo agoOpenAI is great for coding, but DeepSeek is also powerful and much cheaper. I'm doing model training and architecture dev all day. often running loops to monitor training status or executing spec and E2E tests. I really hope token costs come down. It would be awesome if OpenAI could double the usage allowance for the Pro subscription.