OpenAI surprised the tech industry by releasing GPT-5 just days after launching two open-source models.

CEO Sam Altman described GPT-5 as “the best model in the world.” However, TechCrunch’s Maxwell Zeff reports that GPT-5 only slightly outperforms models from Anthropic, Google DeepMind, and xAI on some benchmarks, while slightly trailing on others.

Despite that, GPT-5 is considered a strong performer in a range of tasks, particularly software development.

Pricing is a major focus. “Very happy with the pricing we are able to deliver!” Altman posted.

The GPT-5 API is priced at $1.25 per 1 million input tokens, $10 per 1 million output tokens, and $0.125 per 1 million cached input tokens.

This is comparable to Google’s Gemini 2.5 Pro base pricing, which is also used for coding-related tasks.

However, Google charges more when usage exceeds 200,000 prompts, raising costs for heavy users.

How GPT-5 Compares Against Anthropic, Google, and GPT-4o

OpenAI’s pricing directly undercuts Anthropic’s Claude Opus 4.1, which starts at $15 per 1 million input tokens and $75 per 1 million output tokens. Anthropic offers discounts for cached prompts and batch processing.

Claude Opus has been widely used in developer tools like Cursor and Anthropic’s own assistant, Claude Code. Cursor added GPT-5 as an option shortly after its launch.

Developers with early access to GPT-5 have responded positively. Simon Willison, who appeared in OpenAI’s launch video, wrote that “the pricing is aggressively competitive with other providers.”

Matt Shumer, CEO of HyperWrite, also reacted to the cost comparison, stating, “GPT-5 is cheaper than GPT-4o, which is fantastic. Intelligence per dollar continues to increase.”

Market Reaction Suggests Competitive Pressure Is Building

On X, some users called GPT-5’s pricing “a pricing killer.” Similar praise appeared on Hacker News, suggesting strong community interest in lower model fees.

Questions are now being raised about how competitors will respond. Anthropic may face pressure to reduce prices.

Google, which had previously undercut OpenAI on pricing, could make adjustments as well.

The current shift may indicate the start of a price war among large language model providers.

The Economic Stakes Behind Low-Cost AI Models

Some startups welcome lower prices, though challenges remain. As TechCrunch’s Marina Temkin reports, providers of vibe-coding tools often face financial pressure due to high and variable model fees.

While there is hope that LLM costs will decrease over time, the tech industry continues to make large infrastructure investments.

OpenAI has a $30 billion-per-year contract with Oracle, even as its annual recurring revenue recently reached $10 billion.

Meta plans to invest up to $72 billion in AI infrastructure in 2025, while Alphabet has set aside $85 billion for capital expenditures, largely tied to AI. These rising costs typically push model pricing higher.

OpenAI’s decision to lower prices twice in one week adds pressure to the market. Whether others will follow remains to be seen.

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This article was created with AI assistance.