OpenAI is reportedly plotting a significant reduction in token pricing, directly targeting its formidable rival Anthropic, as a costly price war looms on the horizon. Both companies are already mired in multi-billion-dollar losses, and further price cuts could erode their already precarious profit margins.
Complicating matters further, both companies are approaching initial public offerings (IPOs). How they capture market share without exacerbating losses will be the ultimate question investors use to determine their valuations.
OpenAI is planning significant price cuts for its AI services, directly targeting rival Anthropic, as a price war for enterprise customers takes shape.
According to The Wall Street Journal on Wednesday, citing sources familiar with the matter, OpenAI is evaluating plans to substantially reduce token pricing. Tokens serve as the fundamental billing unit for AI companies; this move aims to seize market share from Anthropic and preemptively counter Anthropic’s anticipated similar price reductions.
Discussions around these potential price cuts remain fluid. OpenAI CEO Sam Altman recently acknowledged at an event that the cost of AI usage has become “a huge problem,” adding, “We’ll have many ways to help users get more value for less money.”
These pricing discussions place financial pressure on both companies. OpenAI and Anthropic are currently sustaining billions of dollars in ongoing losses due to the massive computational costs required for their AI systems to process queries and perform tasks. Significant price reductions could further erode their already strained profit margins.
Anthropic’s Rise, OpenAI Under Pressure
OpenAI’s consideration of price cuts reflects the competitive pressures it faces in the battle for enterprise customers.
Anthropic’s coding tool, Claude Code, has rapidly gained popularity among software engineers, driving a substantial increase in the company’s revenue. The five-year-old startup recently achieved a valuation that surpassed OpenAI’s for the first time. In response, OpenAI has designated its own coding tool, Codex, as a strategic priority.
However, enterprise enthusiasm for AI spending is cooling. Some companies that heavily invested in Anthropic’s products have begun seeking ways to control expenditures. Earlier this year, an Uber executive stated that the company had already exhausted its internal AI budget for 2026; another company executive noted last month the difficulty of directly linking improved AI coding efficiency to the delivery of new customer-facing features.
Such statements have sparked widespread discussion in Silicon Valley about “tokenmaxxing”—the practice of using tokens as extensively as possible regardless of return on investment—to assess whether this approach to boosting productivity remains justified.
Price Wars Test Business Models, Adding Uncertainty to IPO Prospects
A price war will serve as an early stress test for the business models of two companies, both of which are on the verge of highly anticipated initial public offerings. OpenAI and Anthropic currently capture the majority of revenue in the emerging AI product market, fueling their rapid growth. However, investors have long identified a key risk: the high substitutability of the two companies’ products and the relatively low switching costs for customers moving from one provider to the other.
OpenAI has confidentially filed its IPO application this week, following in Anthropic’s footsteps. In a recent Slack message to employees, Sam Altman stated that the company plans to complete its listing "within the next year."
In its confidential filing, OpenAI noted that "certain activities may be more conveniently conducted as a private company," without providing further details. Against this backdrop, whether its pricing strategy can effectively boost market share without further widening losses will be a central issue scrutinized by investors when assessing the company’s IPO valuation.
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Editor/melody