OpenAI and Anthropic in price war as Chinese AI rivals gain ground (arstechnica.com)

OpenAI and Anthropic are entering a competitive price war, significantly reducing prices for their AI models in response to increasing competition from budget-friendly alternatives developed by Chinese companies like Moonshot and DeepSeek. OpenAI has cut prices for its latest model, GPT-5.6 Luna, by 80%, while Anthropic's Claude Opus 5 offers advanced capabilities at half the price of its previous model, Fable 5. These cuts come as users seek to manage rising AI costs, with overall prices from major US labs dropping nearly 25% since mid-July, according to Silicon Data. This shift is particularly noteworthy as it represents a departure from the traditional focus on performance in proprietary "closed" models, as more accessible "open" models from Chinese rivals gain traction in the market. The cost reductions are not only a strategic response to customer demand but also come as both companies are preparing for potential IPOs amid pressures to demonstrate that significant investments in AI can yield financial returns. With companies like DoorDash and Airbnb exploring Chinese alternatives to curb expenses, the latest developments signal a changing landscape in the AI industry, where price competitiveness and accessibility are becoming as crucial as innovation and performance.