OpenAI and Anthropic have implemented massive price cuts on their mid-tier AI models, with OpenAI reducing GPT-5.6 Luna pricing by 80% in July to $0.20/$1.20 per million tokens, while Anthropic dropped Sonnet 5 to $2/$10 per million tokens. Token volume has grown 25-fold since 2023 as enterprises integrated AI into daily workflows, with Uber reportedly exhausting its annual AI budget in just four months. This pricing war comes as both OpenAI and Anthropic prepare for IPOs, complicating their ability to demonstrate durable pricing discipline. Blended token prices have fallen 41% to 64% from mid-2026 peaks, and mid-tier models now deliver roughly 90% of flagship performance, raising questions about how to justify premium pricing for top-tier offerings.
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