OpenAI considers drastic price cuts, anticipating war for users with Anthropic

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 AI 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 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 debate within Silicon Valley about so-called 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 the majority 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.

Write to Keach Hagey at Keach.Hagey@wsj.com and Berber Jin at berber.jin@wsj.com