OpenAI and Anthropic cut their LLM prices by up to 80% within a few months. Why?(minimaxir.com)
371 points by minimaxir 16 hours ago | 360 comments
tl;dr: OpenAI and Anthropic have slashed LLM prices by up to 80% over a few months, driven by tit-for-tat competition and pricing pressure from open-weight models (DeepSeek, Kimi) served by dozens of interchangeable inference providers on platforms like OpenRouter. The author argues this undermines the common claim that token prices are artificially low and will inevitably rise, since switching costs are negligible and inference margins reportedly remain healthy (~80%). The timing is curious given both companies' upcoming IPOs, though improved infrastructure efficiency (e.g., Claude Opus 5.5) may partly explain the cuts.
HN Discussion:
  • ↑Competition from cheaper open models forces price cuts, confirming the article's thesis
  • ↑Incumbents are pursuing regulatory capture to block Chinese open models and build moats
  • ↓Price cuts reflect unsustainable race to bottom signaling an AI winter or bankruptcy
  • ↓Cuts are simply due to technical efficiency gains like smaller models and better caching
  • ~Low API prices mask subsidization via user data or shrinkflated subscriptions