In a bid to defend market share against a surging Anthropic, OpenAI is weighing drastic price cuts on its artificial intelligence (AI) services.
The tech giant is considering significant reductions to the cost of tokens, the standard units used to measure and bill for AI data usage, according to a Wall Street Journal report citing people familiar with the matter.
The move anticipates similar discounts from Anthropic, signaling the onset of a fierce price war just as both companies prepare to go public.
The deliberate shift toward discounting comes as enterprise clients push back against the soaring costs of AI adoption. OpenAI CEO Sam Altman recently acknowledged this financial strain, calling costs “a huge issue” for corporate clients. Altman noted that it has practically become a meme for businesses to exhaust their entire annual AI budget within the first quarter.
The financial fallout of excessive AI usage has already impacted major corporations. Uber Technologies Inc. Chief Technology Officer Praveen Neppalli Naga revealed that the ride-hailing giant had burned through its entire 2026 AI token budget.
Meanwhile, a cultural phenomenon dubbed tokenmaxxing — in which corporations track employee productivity through AI usage metrics — has backfired. Reports indicate employees at Amazon.com Inc. and Meta Platforms Inc. have inflated token metrics by using internal AI tools for non-essential tasks, prompting a sharp corporate retreat from the practice.
“Inference tokens are settling into commodity economics, and commodity inputs trend down under competition,” said Mitch Ashley, vice president and practice lead for Software Lifecycle Engineering and AI-Native Software Engineering at The Futurum Group. “The reductions already shipping across providers, and rumored deeper cuts now being weighed, are a commodity market behaving the way commodity markets do. While surprise credit card bill for model uses are real, token economics will follow the same pricing curve as other commodity products.”
The pricing deliberations arrive at a critical juncture for both AI pioneers, who recently filed for public listings. OpenAI submitted a confidential S-1 filing with the SEC for a potential fall debut led by Goldman Sachs and Morgan Stanley. Anthropic submitted its own confidential IPO prospectus just a week prior.
The competition between the two has intensified following the success of Anthropic’s coding tool, Claude Code. In May, Anthropic closed a $65 billion Series H funding round at a $965 billion valuation, surpassing OpenAI’s $852 billion valuation for the first time. OpenAI has since fast-tracked its own coding tool, Codex, to recapture momentum.
However, some analysts warn a price war could severely damage both companies’ bottom lines, as both remain deep in the red because of massive infrastructure costs. Furthermore, investors view the rival products as highly interchangeable, meaning customers can easily defect to whichever platform offers the lowest rate.
The price war is already expanding across the broader tech landscape. Google recently undercut OpenAI’s cheapest $8 Go tier by slashing its Gemini AI Plus subscription to $5 per month, while doubling Google Drive storage.
As tech giants aggressively slash margins to lock in user bases, the upcoming IPOs will serve as a definitive test of whether the current generative AI business model is sustainable.
