OpenAI is looking to significantly cut down the prices of its AI offerings as the company looks to win over more customers from rival Anthropic, according to a report by The Wall Street Journal. The reported move by the ChatGPT maker comes at a time when both companies are looking to capture a bigger share of enterprise customers ahead of their much-publicised IPOs.
While citing people familiar with the matter, the WSJ report said that OpenAI is looking to make big cuts to the pricing of tokens, the units of data that AI companies use to measure and bill usage of their models.
OpenAI is reportedly making the move in anticipation of similar pricing cuts by Anthropic.
OpenAI CEO Sam Altman had also recently admitted that the cost of using AI had become a “huge issue”.
“We are continuing to push on that more with models. I think we’ll have a lot of ways we can help people get more value for less spend,” Altman said.
The report, however, adds that a reduction in pricing could lead to the erosion of profit margins for both Anthropic and OpenAI. Notably, both AI startups already lose billions of dollars on the enormous computing needs required for running AI models for tasks such as processing queries and carrying out other functions.
OpenAI in race to win over enterprise users from Anthropic:
Reportedly, OpenAI is looking to catch up to Anthropic in the race to win over enterprise users, who are spending massive amounts of money to improve workforce productivity.
Anthropic’s revenue had reportedly surged after the company released its AI-powered coding tool, Claude Code, which had gained significant market share among software engineers.
Meanwhile, OpenAI has been working on improving its own AI coding assistant, Codex. A recent report by the Financial Times noted that OpenAI is working on a ChatGPT “super app” that combines AI agents, coding tools and third-party services.
Companies pouring money into bringing AI to boost productivity:
The report by WSJ noted that some companies have spent so much money into adding Anthropic’s AI into their systems that their leaders have now been forced to rein in the spending.
Among one of the famous instances is Uber CTO Praveen Neppali Naga telling The Information that the company was “back to the drawing board” after blowing past its full-year AI budget after spending past its full-year of AI budget after a surge in usage of AI-powered coding tools like Claude Code.
Meanwhile, a recent report by Bloomberg noted that Uber has introduced spending limits on AI-powered tools used by employees like Claude Code and Cursosr. The company has reportedly set employees AI spending at $1,500 per month in tokens for each AI coding tool.
Moreover, Microsoft had also recently urged its employees to stop using Claude Code and instead move towards its own Github Copilot CLI, as per an internal memo quoted by The Verge.
