AI Price Wars Begin: OpenAI Considers “Drastic Price Cuts” In Pursuit Of Anthropic Customers
June 10th, 2026Via: ZeroHedge:
In short, we now have a classical deflationary race to the bottom, precisely the opposite of what the profit-strapped industry desperately needs to grow into its gargantuan balance sheets (and massive SPVs); Instead, the AI world is about to get hit with a collapse in both revenues and profit margins, while cash burn goes into full-on incinerator mode.
Warning that “business executives have begun to balk at the high prices for AI usage”, the WSJ writes that OpenAI CEO Altman said at a recent event that costs had become “a huge issue.”
“I think we’ll have a lot of ways we can help people get more value for less spend,” he said.
In other words, LLMs tried to push up token prices to and beyond their breaking point… and succeeded.
And now it’s time for the brutal drop: a drastic price war will erode the profit margins of both companies, which already lose billions of dollars because of the enormous cost for computing resources needed to run AI systems.
This is why local models are so important. If you aren’t collecting open models that run 100% offline on consumer hardware, you should be. Go get Jan (https://www.jan.ai), it’s free and open source, download some free local models. It’s like running Claude or ChatGPT desktop apps. It’ll allow you to browse the HuggingFace repository and show which ones your hardware can support. Ditch the subscriptions and API keys.
Most of what makes models capable now is the tools via MCP you give it – access to your email, terminal, browser, web search, even your online accounts if you want (Slack, GitHub), etc. Look for newer models that support tool calling. Even smaller models can be capable given the right tools and instructions.
As mentioned in another post’s video, look for ‘uncensored’ and ‘abliterated’ variants of models if you want reduced/no guardrails.
I forgot to mention ComfyUI if you’re into generating images, audio, and video. There’s some great open models you can download that generate impressive multimedia output running locally. Even hands with 5 fingers.
Then the constraint becomes the cost of the prosumer hardware these days. Sigh.
But what is this consumer hardware you speak of?
RTX 50 series GPUs? DDR5 ram? Stuff might as well be made out of gold now.
Did you see…
https://www.tomshardware.com/tech-industry/artificial-intelligence/pewdiepie-goes-all-in-on-self-hosting-ai-using-modded-gpus-with-plans-to-build-own-model-soon-youtuber-pits-multiple-sentient-chatbots-against-each-other-to-find-the-best-answers
and
https://www.youtube.com/watch?v=rAzT5lcezPs
Pure gold. But, the M-series macs, especially M3+, are a great all-in-one, off-the-shelf, solution.
And you can chain them together via thunderbolt to distribute the model weights and inference — pretty rad. They just had a demo at WWDC where they connected 4 Mac Studio M3 Ultras to run a 1-trillion parameter model.
I hadn’t heard anything about Odysseus…interesting!