OpenAI cuts prices on smaller models as businesses seek lower AI costs

OpenAI has officially announce to cut the prices of two of its low and mid-tier AI models on Thursday, a move that may intensify competition in the industry as U.S. companies battle cheaper Chinese rivals for customers increasingly wary of the technology's ballooning costs.

Sam Altman's artificial intelligence company slashed prices of its newly launched GPT-5.6 models (Luna and Terra) to ease mounting financial pressures on corporate clients and better compete in an increasingly aggressive enterprise AI market.

The ChatGPT maker lowered the cost ‌of its smaller GPT-5.6 Luna model by 80% and its mid-tier Terra by 20%, while leaving the price of its biggest and flagship Sol model unchanged.

The cuts show that rising cost scrutiny by businesses facing hefty AI bills is forcing American labs to rethink pricing.

Many tech CEOs have also said in recent months that cheaper AI options are key to the technology's widespread adoption.

OpenAI's new pricing also turns up the heat on Anthropic, whose Claude models dominate enterprise and developer use but sit at the costlier end of the market.

Both companies have been under pressure from open-source Chinese rivals such as Z.ai's GLM-5.2 that nearly match their performance at a lower cost.

Analysts have said that cutting prices could boost usage of OpenAI's and Anthropic's technology, but strain their finances ahead of highly anticipated initial public offerings.

Additionally, OpenAI confirmed that these lower costs for Luna and Terra are also being integrated directly into how usage counts against paid subscriptions when utilizing agentic tools like Codex and ChatGPT Work.