OpenAI and Anthropic cut their LLM prices by up to 80% within a few months. Why?

Let’s look at a quick timeline of the major LLM model announcements from both OpenAI and Anthropic over the past few months. All pricing numbers provided are input MTok / output MTok / cache read MTok. June 26, 2026 OpenAI announced GPT-5.6 Sol and Luna. Sol is the direct successor to GPT 5.5 at the same price of $5 / $30 / $0.50, while Luna is a small model specifically designed for cheaper use cases at $1 / $6 / $0.10. They also announced a Terra model that’s in between those two models, but few cared about it. June 30, 2026 Anthropic announced Claude Sonnet 5, which Anthropic claimed to be closer to their Opus models, but feedback was mixed. Notably, it had launch pricing of $2 / $10 / $0.20 which was initially supposed to be temporary but would go up. July 24, 2026 Anthropic announced Claude Opus 5, which was a long-awaited major-version update given the impact Opus 4.5 had on the rise of agentic coding, at a price of $5 / $25 / $0.50 (similar to GPT-5.6 Sol). Although some of the…