Chatbots Get Cheaper; Anthropic Reigns Supreme in Coding

When DeepSeek released its high-performing open-source artificial intelligence earlier this year, Microsoft CEO Satya Nadella predicted that the price of AI models and applications would soon come under pressure. And he said that trend would prevent any one company from gaining a permanent advantage over others in selling AI to enterprises. 

“Buyers are smart,” Nadella said in a February podcast interview. “The open-source alternative will actually make sure that the closed-source, winner-take-all [scenario] is mitigated.” He was likely referring to OpenAI and Anthropic, which sell the most popular closed-source models.

Now we’re starting to see more evidence that AI firms are softening their prices for enterprises—but in a way that’s putting pressure on Microsoft’s own AI sales! 

As Sri and I reported Wednesday, OpenAI recently started offering discounts on its ChatGPT Enterprise chatbot for customers who agree to sign broad contracts with the startup. 

The discounts come as OpenAI began selling a version of its o3 model for 80% less than the price of earlier versions, the latest in a steady stream of price drops for models from OpenAI and other developers. 

Companies have been telling us for months that the cost of running their existing AI products, such as customer support chatbots or internal productivity tools, has dropped. In some cases, that’s helped some of them reduce their overall AI spending even as they use more of the technology.