OpenAI Lowers Prices on Smaller AI Models
Synopsis
The company cut prices by up to 80% on select models as competition with lower-cost rivals heats up.
Key Highlights
- OpenAI reduced prices for its GPT-5.6 Luna and Terra models.
- The company cut 80% of Luna prices and 20% pricing of Terra.
- Pricing for the flagship Sol model is unchanged.
OpenAI has reduced prices on some of its lower-tier AI models as companies continue to monitor their AI expenditures and U.S. businesses are hit by increased competition from cheaper Chinese competitors.
This smaller GPT-5.6 saw an 80% price drop by the ChatGPT maker. The price of its mid-tier Terra decreased by 20% and left its top-end Sol model unchanged.
Businesses are Calling for Cheaper AI Prices
The price cuts reflect mounting pressure on businesses from rising AI costs, prompting U.S. AI companies to revise pricing plans. Reducing AI costs has also been an important goal among technology executives desiring to enable wider implementation.
The new pricing ramps up competition with Anthropic, which continues to be the go-to choice for enterprise customers and developers using its Claude models but sits at the premium end of the market.
OpenAI and Anthropic are also dealing with the recent success of open-source Chinese AI models, including Z.ai’s GLM-5.2 that delivers comparable performance at a more affordable price.
This profit squeeze could push their finances in the lead-up to expected initial public offerings, analysts said, while lower prices could drive more use of AI models from OpenAI as well as Anthropic.
Lower Token Prices
OpenAI said the price drops affect only its small and medium-tier models, but firms will gain because those models are now capable of performing tasks previously reserved for its top systems.
With the new pricing, processing one million input tokens with Luna has become cheaper than earlier. It now costs US$0.20, down from US$1 and Terra costs US$2 down from the previous cost of US$2.5.
The price to produce one million output tokens drops to US$1.20 from US$6 for Luna and the range also narrows for Terra, down to US$12 from US$15 before.
Anthropic charges US$3 per million input tokens and US$15 per million output tokens for Claude Sonnet 4.6, which is more expensive than Terra.
OpenAI said the lower prices were possible partly as a result of efficiency gains from GPT-5.6 increased code quality and performance during internal development.
The company added that token prices have broadly fallen over the past year but achieving those AI tasks has become more expensive as providers have moved from flat subscriptions to usage-based billing, resulting in customer invoices being harder to predict.
Source: Reuters
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
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