OpenAI and Anthropic cut their LLM prices by up to 80% within a few months. Why?

verdverm

I fully expect token vendors to go the way of mobile data providers. Increasing throughput and efficiency, yet commoditized and not reaping the massive rewards of the economic gains their technologies enable. Can't wait for the unlimited plans we will have in due time.

buckleyourshoe

Competition drives prices down. We tried Kimi and GLM models after hitting 'cybersecurity' blocks on OpenAI and Anthropic. We found them to be much cheaper to access and helped us complete our work without 'cybersecurity' refusals blocking us.

gum_wobble

Because they have found a way that cost them less to have you use a lesser capable model o less expensive

hauntingseaweed

Price war. Duh. There is no moat. Also them chinese competition. It’s going to be race to the bottom. It’s gonna be ugly for the stock market. Good for consumers though!

Kuyawa

Duh, China?

bhu8

It’s probably more efficient caching methods and smaller models (6 sol is actually 6 terra and opus 5.5 is smaller than 5.1 etc). Don’t overthink this please

chakintosh

It’s a race to the bottom to see who blinks first and goes bankrupt. It’s not sustainable.

deadbabe

People think OpenAI and Anthropic are just these wildly unprofitable companies with no future or business. They know what they’re doing. The naysayers are like the people that said this little internet thing wasn’t going anywhere.

prjkt

They're competing with NVIDIA (huggingface)

Starlevel004

> It turned out that GPT-6 Sol was a dud performancewise, so a week later OpenAI announced GPT-6.1 Sol, I strongly believe that GPT-6 Sol was only ever meant to be the web chat model, but it was a panic public release to respond to Opus 5.5. It's clearly been over fitted for drawing diagrams in the chat.

dez11de

Moore’s Law.

redrix

This is why Anthropic and OpenAI are pushing for more “regulation”. You can’t show ROI to investors by cutting inference costs. Regulation might inconvenience them a little, but the upside is huge if it means open models out of China get banned.

paxy

Because they have been making inference a lot more hardware efficient.

EXHades

Think of all the open source projects in DeepSeek

maxdo

It’s both competition almost 3 way , cheaper open source , a clearly lagging behind a bit open ai that cuts prices to win Anthropic customers . There was an interesting technical advantage by some models where Anthropic as a leader start loosing dramatically in speed too. 5.5 made a come back in that dimension.

garo-pro

Part of the cheaper costs, if not the majority, probably are KV cache optimisations. https://insufferable.dev/posts/the-ai-race-just-got-awkward/

332451b

DeepSeek claims $38 of revenue per GPU, per hour for Flash V4. That is $332,880 per GPU, per year. This matches their DeepInfer numbers: 25,600 output tokens/s per GPU sold at $0.60 per million -> $55 minus some other overhead to arrive at $38. For the bigger Anthropic and OpenAI models (and associated higher prices) there are many unknown factors. But presumably they also work hard on optimizations, and it's not so crazy to think they had or still have a lot of wiggle room to adjust prices.

jameson

competition. that's good for consumers. though problem with proprietary LLMs it's difficult to know if the vendor's supposed "optimization" affects performance negatively because it's difficult to define an SLA

skhameneh

Well they did pull back on ZDR a few times and at least Anthropic has made their arguments (that I disagree with) that model outputs, no matter how much user context was fed, do not fall under their definition of "user data". Are these prices subsidized by user generated outputs? Can I even trust any answer to not be carefully worded and rephrase the response to "user data"? Even so, what's to prevent some "oops" event that seems to be all too common? At least some months back Bedrock seemed to be properly isolated, but I've heard of many getting non-ZDR notices for new models.

epsteingpt

Because there's limited demand, and GPU capacity is like airline seats use it or lose it. This will only get worse.