AI Price War Looms as Anthropic, OpenAI Approach IPOs

The two most anticipated artificial intelligence IPOs of the year may face headwinds from an unexpected source: each other. As Anthropic and OpenAI prepare to go public following their massive private funding rounds, analysts warn that competitive pricing dynamics could dampen investor enthusiasm and pressure the companies' sky-high valuations.

Both companies have filed initial paperwork with the Securities and Exchange Commission. Anthropic raised $65 billion in May at a $965 billion valuation, while OpenAI closed a $122 billion round in March at an $852 billion valuation. These figures follow SpaceX's successful IPO earlier this month at a $1.75 trillion valuation.

Why it matters

The pricing pressure facing frontier AI models signals a broader market maturation that could reshape investment strategies across the sector. If premium AI services become commoditized faster than expected, the massive valuations commanded by leading model makers may prove difficult to justify—forcing investors to recalibrate where they place their bets in the AI value chain.

Pricing pressure from multiple fronts

Paul Meeks, head of technology research at Freedom Capital Markets, noted that OpenAI has discussed lowering prices. "Particularly as [OpenAI and Anthropic] ramp up for IPOs, if that triggers at least a temporary battle on price, then that might change" their revenue dynamics, he told CNBC.

The threat extends beyond direct competition between the two companies. Cheaper AI models from providers like China's DeepSeek are proving capable enough for most use cases at a fraction of the cost. Deutsche Bank's Jim Reid observed that DeepSeek's V4-Pro "does much the same job at roughly 1.5% of the cost" of Anthropic's Claude Fable 5 for approximately 90% of everyday tasks.

According to Artificial Analysis, an analytics website, budget AI models from DeepSeek, ChatGPT, MiMo and MiniMax average below $0.13 per task, while Anthropic's top three Claude versions cost between $1.80 and $2.75. "Adopters who only need a reliable workhorse – not a supercar – will increasingly ask whether the frontier premium is worth paying," Reid wrote.

Enterprise customers tighten budgets

Corporate AI spending is already showing signs of strain. Uber's chief technology officer revealed in April that the company exhausted its entire 2026 AI budget in just four months. Uber's operations chief later said it was becoming "harder to justify" AI expenditures.

Microsoft has restricted employee access to large language models and canceled Claude Code licenses to control costs, according to Forbes. Meta Platforms, Salesforce and DoorDash have similarly scaled back AI access or emphasized the need for productive use, the Wall Street Journal reported in May.

Investors shift upstream

Facing uncertainty around model pricing, investors are gravitating toward hardware and infrastructure plays. Tarek Hamid, a senior analyst at JPMorgan, projects that hyperscalers will generate over $900 billion in operating cash flow in 2027, with early returns on AI investment remaining positive. The bank expects more than $3 trillion in financings for AI-specific chips over the next five years.

Meeks still anticipates "enormous AI infrastructure spending" continuing "well into 2028," suggesting the upstream opportunity remains robust even as model economics face pressure.

Market positioning concerns

Beyond pricing, some analysts question OpenAI's competitive position. Dan Niles, founder of Niles Investment Management, argued that OpenAI is "stuck between" Alphabet's consumer AI dominance and Anthropic's corporate positioning. "I think Google wins in consumer … In corporate, you have Anthropic," he said. "I think OpenAI is stuck between the two of them."

These details were first reported by CNBC.