OpenAI slashes price for model again

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OpenAI’s latest model, GPT-6.1 Terra, is 50% cheaper than its previous version, showing how the generative AI vendor continues to respond to price pressure from open-weight providers. However, the escalating AI model price war could become daunting for enterprises now faced with multiple models at their lowest prices.

OpenAI introduced the updated model on Monday, nearly a month after releasing GPT-6.1 Sol. The new Terra model is fast and efficient, combining visual reasoning and precise use of computers, OpenAI said. The model is good at computer-based tasks such as drafting proposals, filling out forms and editing videos.

However, its price is its true selling point: $1 per million input tokens and $5 per million output tokens. In comparison, GPT-6.1 Sol costs $2 per million input tokens and $10 per million output tokens. GPT-5.6 Terra also costs $2 per million input tokens and $12 per million output tokens.

The release of GPT-6.1 Terra marks the fourth consecutive time OpenAI has slashed the price of its models, a trend it and its chief rival Anthropic are extending as they compete against open-weight models from Chinese vendors such as Alibaba, Baidu and Z.ai. Comparatively, Anthropic, which filed its IPO prospectus with the SEC this week, has also slashed its pricing, with the most recent price cut in October, when the vendor reduced the price of Haiku 5.5 by 90% per 100K tokens and $0.50 per million output tokens.

“They are refining our ability to get the most bang for our buck out of these models,” said David Nicholson, an analyst at Futurum Group. “If everything is priced at the highest level, then people will look for alternatives, so what they’re trying to do is make their tools as efficient as possible.”

Lower price but more confusion

Meanwhile, for model users, it’s unclear which model is right for which environment or workload, even as model makers continue to reduce prices.

“It remains to be seen,” Nicholson said.