OpenAI Cuts Prices by Up to 90% to Lure Anthropic Customers

A report by The Information states that OpenAI is attracting major clients from Anthropic through aggressive discounts, a strategy that is succeeding in boosting its market share. Among the companies that switched are Rippling, Replit, and DataCamp, as reported by The Decoder referencing the report.

Parker Conrad, CEO of Rippling, said his company increased OpenAI's share of its coding workload from 16% to 52%, while Anthropic's share dropped from 57% to 18%. Replit made the switch after OpenAI offered a discount exceeding 30% on an annual contract worth over $100 million.

Jonathan Cornelissen, CEO of DataCamp, said OpenAI's pricing reduced his costs by 80% to 90%. The report added that a US bank with over $7 billion in assets doubled its ChatGPT seats to 500 employees at no extra cost, paying less than $7 per user instead of $20 or more.

OpenAI is buying part of its market share at the expense of its profit margins, but it has also achieved real cost reductions across its Sol and Luna model series thanks to higher model and infrastructure efficiency. The report noted that Anthropic's growth slowed from Q2 to Q3 according to an investor note, while both companies face growing pricing pressure from China, where DeepSeek and Kimi models offer comparable performance at a fraction of the cost. The report relies on a single source, The Information.

What do these terms mean?

Market share: The percentage a company holds of the total spending or usage in a specific market, measured here by the share of a customer's workload.

Profit margin: The difference between the selling price and the cost; a company may intentionally lower prices to expand market share even if its margin decreases.

API: A technical method that allows companies to connect their products to an AI model and use it within their own applications.