OpenAI Eyes AI Price Cuts Ahead Of IPO As Competition With Anthropic Intensifies

As it gets ready for its public market debut, OpenAI is thinking about lowering the pricing of its AI solutions in what might eventually turn into a fiercely contested price war, according to a WSJ report.  

Earlier this week, the maker of ChatGPT discreetly filed for an IPO, following last week’s action by fierce rival Anthropic. Sam Altman, the CEO of OpenAI, had previously noted that growing expenses were a major issue. 

“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,” the WSJ report said. 

The price cut by OpenAI could be in anticipation of a similar move that Anthropic is likely considering, the report added. Both the companies are fiercely competing with each other to get a larger share of the enterprise AI market. Anthropic’s Claude has made headways for its enterprise AI offerings and the company is looking to double its revenue to USD10.9 billion in second quarter from USD4.8 billion in the first quarter. 

Both OpenAI and Anthropic are also vying to get a greater share of the coding market and win confidence of software engineers with their respective offerings Claude Code and Codex respectively. 

Anthropic recently surpassed OpenAI in terms of valuation as the Claude-maker raised USD65 billion in Series H funding in May at USD965 billion. OpenAI was last valued at USD852 billion in March. 

Both companies have raised the stakes in the tough AI battle amid global corporations adopting agentic AI tools to increase productivity. The price cut could further crimp margins for these companies that are already burning dollars for massive compute capacity to train their AI models. 

Another major AI player SpaceX will list on Nasdaq on Friday. The Elon Musk-owned company has fixed the IPO price at USD135 per share eyeing a valuation of USD1.75 trillion. A blockbuster listing could catapult the Tesla owner to become the world’s first trillionaire. 

Big AI players are pouring in billions of dollars to ramp up capacities anticipating a boom in AI demand. Major hyperscalers like Amazon AWS and Google-parent Alphabet are raising funds to ramp up their compute capacities.

(ANI)

Also Read: Microsoft Blocks Claude Fable 5 For Employees Over 30-Day Data Retention Policy: Other Models Remain Available