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AI companies are now racing to the bottom — crashing token prices and competitive models push companies to cut costs
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Anthropic hasn't cut prices, but replaced its most-affordable Opus 4.8 model with a more capable Claude 5.0 at the same price point.
Still, after months of companies that use AI heavily complaining about skyrocketing token costs, the news of an almost-as-good model at a much lower price really made a splash.
Now they're having to really compete on price, and to do it, OpenAI has massively reduced the price of its models.
OpenAI launched ChatGPT 5.4 in March with powerful new agentic capabilities for $2.50 per million input tokens and $15 per million output tokens.
But even then, it's hard to imagine the big companies covering anything close to their enormous investments with direct AI earnings.