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OpenAI mulls slashing prices as it competes with Anthropic for users

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Re: OpenAI mulls slashing prices as it competes with Anthropic for users

#21

Post by broodbucket »

stingraycharles wrote: post #13
WhitneyLand wrote: post #11

The frontier labs commonly trade spots at the top of the benchmarks with each new model release. The timing of these price cut discussions says to me OpenAI has no imminent release that will be edging out Mythos/Fable. If so the question becomes when can they do so, or is this possibly a turning point where Anthropic keeps the crown to themselves for the foreseeable future.

It seems that OpenAI lacks a clear target audience, they try to be everything for everyone. Anthropic is targeting professionals / enterprise users. I don’t fully understand why OpenAI lacks this focus, as clearly identifying a target market is one of the first things you do with a business strategy. But instead they just seem to throw stuff against the wall and see what sticks.

They have the consumer market but want the enterprise market, because it's a lot more lucrative, so they're probably going to just keep chasing that even though there's no signs they'll stop losing to Anthropic. They don't need to do that much to keep the consumer market because of momentum.

Re: OpenAI mulls slashing prices as it competes with Anthropic for users

#22

Post by jillesvangurp »

anonym00se1 wrote: post #2

How does OpenAI plan to be profitable?

Economies of scale, optimization of models, hardware, energy infrastructure, data center construction and operation, etc. Stuff is currently relatively inefficient and there's lots of room for optimization. All the usual stuff.

Re: OpenAI mulls slashing prices as it competes with Anthropic for users

#25

Post by senectus1 »

jillesvangurp wrote: post #22
anonym00se1 wrote: post #2

How does OpenAI plan to be profitable?

Economies of scale, optimization of models, hardware, energy infrastructure, data center construction and operation, etc. Stuff is currently relatively inefficient and there's lots of room for optimization. All the usual stuff.

Last man standing monopoly.

Re: OpenAI mulls slashing prices as it competes with Anthropic for users

#26

Post by Haven880 »

LoganDark wrote: post #17
ses1984 wrote: post #15

Earlier quoted context omitted.

I don’t think Amazon did that…?

Amazon would absolutely take a loss on certain products in order to dominate the category, squeeze out competitors and then bring the price back up. It's one of the reasons they're so dominant in general now. Also one of the reasons why Amazon Basics has basically everything that exists and they're usually at or near the top of their respective categories -- third-party sellers simply can't compete.

To a certain extent, but not completely. OpenAI and Anthropic are taking losses on their entire offering—that is a huge difference. Amazon, for example, has pumped its profits back into R&D for decades. What AI companies are doing right now is running the Uber playbook on an epic scale. In the US, there isn't much competition, so they can maintain a duopoly. But look at what happened in China: Uber collapsed and pulled out. Now, the entire world is facing competition from DeepSeek and Qwen at a fraction of the cost. According to a reliable Shenzhen source, they will halve their prices again by the end of this year using newer Huawei GPUs. The current 7nm chips are already bleeding OpenAI dry. By the end of this year, they will upgrade to 5nm, and by June of next year, 3nm. They don't even have to be better—just 95% as good at 1/20th of the price. I don't see OpenAI and Anthropic surviving much outside of America; they are likely staring down Groupon’s fate. You can research it yourself: China has no issues with electricity because they have a massive power surplus. This is why OpenAI and Anthropic are so scared right now. They must IPO by 2027, because after that, they will suffer the exact same fate as Groupon.

Re: OpenAI mulls slashing prices as it competes with Anthropic for users

#28

Post by mattjoyce »

WhitneyLand wrote: post #11

The frontier labs commonly trade spots at the top of the benchmarks with each new model release. The timing of these price cut discussions says to me OpenAI has no imminent release that will be edging out Mythos/Fable. If so the question becomes when can they do so, or is this possibly a turning point where Anthropic keeps the crown to themselves for the foreseeable future.

At the right price, these model don't need to be the best, good enough will do. I think we're fast approaching good enough for most users.

Re: OpenAI mulls slashing prices as it competes with Anthropic for users

#29

Post by olmo23 »

dannyw wrote: post #27

Competition is lovely. And ironically, OpenAI will probably get and keep lots of enterprise customers like Microsoft^ that won’t accept anything less of ZDR. [1] https://www.theverge.com/report/947575/microsoft-claude-fabl...

ZDR = Zero Data Retention

Re: OpenAI mulls slashing prices as it competes with Anthropic for users

#30

Post by LoganDark »

Haven880 wrote: post #26
LoganDark wrote: post #17

Earlier quoted context omitted.

Amazon would absolutely take a loss on certain products in order to dominate the category, squeeze out competitors and then bring the price back up. It's one of the reasons they're so dominant in general now. Also one of the reasons why Amazon Basics has basically everything that exists and they're usually at or near the top of their respective categories -- third-party sellers simply can't compete.

To a certain extent, but not completely. OpenAI and Anthropic are taking losses on their entire offering—that is a huge difference. Amazon, for example, has pumped its profits back into R&D for decades. What AI companies are doing right now is running the Uber playbook on an epic scale. In the US, there isn't much competition, so they can maintain a duopoly. But look at what happened in China: Uber collapsed and pull…

I do love the DeepSeek models, they're so incredibly cheap and for functionality that nears Sonnet. Weeks of heavy usage still lands squarely under $10 for me.

Compare that with how I pay $200 a month for Claude and am still hitting the limits with any sort of sustained usage. They even have a special usage limit for Sonnet to prevent you from using too much of that either.

I'm super frustrated with how slow DeepSeek is though. And it's not nearly ready to be unsupervised for long periods of time like Claude is. Just this morning I left Fable 5 unsupervised for about eight hours straight. Single turn. DeepSeek often gets even much shorter turns wrong, so I wouldn't trust it with anywhere near that length of time alone. Not to mention it'd get so much less done because of how slow it is.

Also, did you use an LLM to correct your grammar after you posted? Lol

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