OpenAI and Anthropic in Price War as Chinese AI Rivals Gain Ground

Leading US AI labs OpenAI and Anthropic are releasing cheaper models to retain cost-conscious customers who are switching to cut-price alternatives from Chinese rivals. OpenAI recently slashed prices for GPT-5.6 Luna, its 'fastest and most affordable model', by 80 percent. Anthropic launched Claude Opus 5, touting its 'frontier intelligence… at half the price' of Fable 5, its most capable model. These moves have helped decrease prices for leading US models by almost a quarter since mid-July, according to Silicon Data's token price index. The price war comes as rising AI bills push companies to curb usage and seek cheaper models, helping Chinese developers such as Moonshot and DeepSeek make inroads from Silicon Valley to Europe. The cuts mark a shift for US AI groups that make proprietary 'closed' models, which have competed heavily on performance, while increasingly capable 'open' Chinese models have contributed to price pressure. OpenAI and Anthropic are also plotting initial public offerings at trillion-dollar valuations, and investors seek evidence that vast AI spending can generate returns. Some businesses have responded to rising bills by imposing caps on AI usage or testing cheaper alternatives, with companies like DoorDash and Airbnb starting to use Chinese-made models to rein in costs.