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OpenAI Weighs Token Price Cuts as Rivalry With Anthropic Heats Up
OpenAI weighs cutting token prices as Anthropic's Claude Code gains traction. A price war could squeeze margins as both prepare for IPOs.
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OpenAI is considering broad cuts to the price it charges for AI tokens, and the timing tracks with an expected move from Anthropic. The Wall Street Journal reported Thursday, citing people familiar with the matter, that the discussions are still in flux.
CEO Sam Altman has already telegraphed the direction. At a recent event, he called AI costs “a huge issue” for business customers. “I think we’ll have a lot of ways we can help people get more value for less spend,” he said.
The problem is that both companies are burning billions. The compute costs to run AI systems at scale are enormous. Cutting token prices would compress margins right as OpenAI and Anthropic pursue IPOs that will put those economics in front of public investors for the first time. OpenAI filed confidentially for an IPO earlier this week. Altman told employees the company plans to go public within the next year.
Competitive pressure is real. Anthropic’s revenue surged after its coding tool Claude Code caught fire among software engineers. The startup briefly overtook OpenAI’s valuation. OpenAI has since elevated its own coding tool, Codex, to a company priority.
Enterprise enthusiasm for AI has started hitting budget ceilings. An Uber executive said earlier this year the company had exhausted its 2026 spending on agentic AI. Another executive said last month it was hard to connect AI-driven coding gains to product improvements customers could actually see. Those admissions have sparked a broader Silicon Valley debate about “tokenmaxxing” – burning through tokens at high volume without a clear return.
That backdrop makes a price war both logical and risky. The two dominant players have captured most of the revenue flowing into new AI products. Investors have pointed to a structural vulnerability: customers can switch between them easily. A price war tests that weakness directly. Whoever blinks first sets the floor for an industry that has not yet figured out how to grow profitably.