OpenAI considers making ChatGPT cheaper to fend off Anthropic
What's the story
OpenAI is reportedly considering major price reductions for its artificial intelligence services. This strategic move is aimed at attracting customers from its competitor, Anthropic, The Wall Street Journal reported. According to sources familiar with the matter, 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."
Pricing details
Current pricing of GPT and Claude AI
OpenAI's current pricing model is tiered, with users paying $8, $20, or over $100 per month for access to its flagship GPT-5.5 models. On the other hand, Anthropic charges a flat fee of $17 per month for an annual subscription to Claude Pro and over $100 monthly for a subscription to Claude Max. The contrasting pricing strategies highlight the competitive landscape in the AI industry.
Market moves
IPO filings and market valuations
The potential price cuts come amid growing competition between OpenAI and Anthropic. OpenAI has recently filed for initial public offerings (IPOs) with the US Securities and Exchange Commission. The market valuation of these two firms also highlights their rivalry. Anthropic's Series H funding round closed on May 28 at a whopping $965 billion valuation, slightly ahead of OpenAI's $852 billion valuation in March.
User milestones
ChatGPT's unprecedented growth
Despite the competitive landscape, OpenAI's ChatGPT has achieved a major milestone. It became the first app to hit one billion monthly users in May, roughly three years after its November 2022 launch. This achievement surpasses Google Maps, which took around five years post-launch to reach the same number of monthly users. The data was provided by market intelligence firm Sensor Tower.