OpenAI has released its newest flagship model, GPT-5, which has sent shockwaves through the tech industry for the second time this week. The new model is available under an open-source license and boasts impressive performance in various applications, particularly coding.
GPT-5’s CEO, Sam Altman, claims that it’s “the best model in the world,” but some experts argue that its performance is only slightly better than other leading AI models from companies like Anthropic, Google DeepMind, and xAI. Despite this, GPT-5 is poised to compete well in price, with a top-level API costing $1.25 per 1 million tokens of input.
This pricing mirrors Google’s Gemini 2.5 Pro basic subscription for coding-related tasks but is significantly lower than Anthropic’s Claude Opus 4.1 model. OpenAI’s aggressive pricing has sparked praise from developers, who describe it as “aggressively competitive” with other providers.
The move by OpenAI to launch GPT-5 at such a low price may put pressure on competitors to follow suit and initiate a potential LLM (Large Language Model) price war. However, given the enormous investments made by companies like Meta, Alphabet, and Oracle in AI infrastructure, it’s unclear whether this trend will lead to lower costs for startups.
Source: https://techcrunch.com/2025/08/08/openai-priced-gpt-5-so-low-it-may-spark-a-price-war