OpenAI Weighs Drastic Price Cuts --- Company looks to win customers from Anthropic as users rein in spending

 

What part of American companies, using AI, stick to cheaper Chinese open source, local, products, allowing to be optimized locally simply, and trade secrets to keep inside the company?

 

An estimated 80% of U.S. AI startups and a growing number of enterprise organizations quietly use Chinese open-source AI models. Platforms like DeepSeek and models from Alibaba's Qwen are adopted to avoid pricey Silicon Valley APIs while maintaining the privacy of local, in-house servers.

 

Why American Companies Adopt Chinese Open-Source AI

 

•      Cost Efficiency: Chinese AI labs are successfully lowering token generation costs, with some offerings charging only $2 to $3 per million output tokens compared to $15 for equivalent U.S. alternatives.

 

•      Trade Secret Protection: By downloading local weights and executing models on secure, internal company servers rather than proprietary cloud APIs, businesses keep their data secure from third-party prying eyes.  Everybody is looking at you, Mr. Amodei from Anthropic.

 

•      Local Optimization: Deploying open-source models natively (often referred to as "running on the edge") allows developers to easily fine-tune and optimize the models with proprietary, company-specific data without sharing that information publicly.

 

Who is Making the Switch?

•          U.S. AI Startups: The rapid release velocity and benchmark-matching performance of Chinese models (like DeepSeek R1) have made them a default foundation for a vast majority of new U.S. developer applications and tools.

•          Enterprise & Tech Firms: U.S. companies are increasingly turning to open platforms instead of relying solely on closed-source models from OpenAI or Anthropic.

 

The Shift to "Good Enough"

While massive, state-of-the-art closed models (like Claude or GPT) still edge out some open-source models in highly complex programming or mathematical benchmarks, many U.S. executives increasingly favor the "good enough" performance and superior affordability of Chinese open-source alternatives.

 

It seems that American AI companies are in deep doodoo, pricewise or otherwise. They are starting to be nervous:

 

“OpenAI is considering drastically lowering the prices it charges users as it seeks to win customers from its rival Anthropic.

 

The company is weighing significant cuts to what it charges for tokens, the unit of measurement artificial-intelligence firms use to bill for their products, according to people familiar with the matter.

 

The move would be in anticipation of similar cuts the company expects at Anthropic, the people said.

 

Business executives have begun to balk at the high prices for AI usage.

 

OpenAI Chief Executive Sam Altman said at a recent event that costs had become "a huge issue."

 

"I think we'll have a lot of ways we can help people get more value for less spend," he said.

 

Drastic price cuts could potentially erode the profit margins of both companies, which already lose billions of dollars because of the enormous cost for computing resources needed for AI systems to process queries and carry out tasks.

 

OpenAI is trying to catch up with its younger rival in the race to win enterprise customers that are paying large amounts of money for AI tools that can improve workplace productivity.

 

Anthropic's revenue recently surged after its coding tool Claude Code went viral among software engineers, and the five-year-old startup surpassed OpenAI's valuation for the first time. OpenAI has since made its own coding tool, Codex, a major focus of the company.

 

Some corporations poured so much money into Anthropic's products that their leaders are now seeking to rein in spending.

 

Earlier this year, an Uber executive said the company had maxed out its 2026 budget for agentic, or autonomous, AI use, and another company leader said last month that it was difficult to link AI coding productivity improvements to new customer features.

 

Such comments from many executives have triggered a broader debate within Silicon Valley about "tokenmaxxing," or the practice of using as many tokens as possible to boost productivity, including in ways that don't generate returns on investment.

 

A price war would be an early test of the strength of both companies' business models ahead of hotly anticipated public listings.

 

OpenAI and Anthropic have captured most of revenue from new AI products, powering their rise. But an underlying risk that investors have long identified is the interchangeability of their products, and the ease with which customers can abandon one for the other.

 

OpenAI confidentially filed for an IPO earlier this week, following in the footsteps of Anthropic.

 

In a recent Slack message to employees, Altman said the company plans to go public "within the next year." The message was earlier reported by the Information.

 

The company said in a confidential filing statement that there were "things we want to do that are likely easier as a private company," but declined to elaborate further.

 

News Corp, owner of The Wall Street Journal, has a content-licensing partnership with OpenAI.” [1]

 

1. OpenAI Weighs Drastic Price Cuts --- Company looks to win customers from Anthropic as users rein in spending. Keach Hagey; Berber, Jin.  Wall Street Journal, Eastern edition; New York, N.Y.. 11 June 2026: B1.