OpenAI and Anthropic in price war as Chinese AI rivals gain ground

US groups release cheaper models after new challenges to their trillion-dollar ambitions.

Leading US AI labs such as OpenAI and Anthropic are releasing cheaper models as they fight to retain cost-conscious customers who are switching to cut-price alternatives from Chinese rivals. The price war comes as rising AI bills push companies to curb usage and seek cheaper models, helping Chinese developers including Moonshot and DeepSeek make inroads with users from Silicon Valley to Europe.

Price cuts

OpenAI recently said that it was slashing prices for GPT-5.6 Luna, its “fastest and most affordable model”, by 80 percent. Anthropic has launched Claude Opus 5, touting the system’s “frontier intelligence… at half the price” of Fable 5, the company’s most capable model.

The moves have helped decrease prices that customers are paying for models from leading US labs by almost a quarter since mid-July, according to Silicon Data’s token price index. Tokens are the units of data processed by language models and are used to calculate many customers’ bills.

Competitive shift

The cuts mark a shift for US AI groups that make proprietary “closed” models that have, until now, competed heavily on performance. Increasingly capable “open” Chinese models-which can be freely downloaded and tweaked by developers-have contributed to pressure on prices.

The moves also come as OpenAI and Anthropic plot initial public offerings at trillion-dollar valuations while investors seek evidence that the industry’s vast spending on AI can generate returns.

Cost pressures for business users

Corporate AI users face cost pressures as Anthropic and OpenAI shift some enterprise customers away from flat subscriptions and toward usage-based billing, under which companies pay according to the computational resources they consume. Some businesses have responded to a rise in bills by imposing caps on AI usage or testing cheaper alternatives.

Companies such as DoorDash and Airbnb have said they have started to use Chinese-made models in an effort to rein in bills.

Chinese labs narrow the gap

That shift has coincided with a flurry of releases from Chinese labs that have narrowed the performance gap with leading US models, raising concerns in the US tech industry that American developers could lose customers even as they spend heavily to maintain their technological edge.