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

Over the past three months (June-September 2026), OpenAI and Anthropic have drastically reduced LLM pricing by up to 80%, driven by intense competition and the need to remain cost-competitive against rivals like DeepSeek. Both companies have introduced new model versions with significantly lower prices while maintaining or improving performance, particularly reducing cache read costs that dominate expenses for agentic coding applications. This race-to-the-bottom pricing reflects a shift in the AI market from competing on capability alone to competing on cost-efficiency and value-per-task.