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OpenAI Slashed AI Prices. Usage Soared and Revenue Jumped.
businessinsider.com • • business
Key Points:
- OpenAI recently cut prices for its GPT-5.6 Luna model by 80% and its mid-range Terra model by 20%, leading to a significant increase in AI usage among customers.
- Analysts from TD Cowen found that the effective price of using Luna dropped tenfold, while consumption increased 14-fold; similarly, Terra's price fell threefold with a fivefold rise in usage.
- Despite the steep price cuts, OpenAI's revenue from Luna and Terra models rose by approximately 34% and 45%, respectively, illustrating a case of Jevons Paradox where lower prices drive higher overall consumption and revenue.
- The trend suggests that as AI becomes cheaper, companies find more applications for it, such as analyzing documents, answering queries, and automating tasks, potentially leading to sustained growth in AI adoption.
- Although these findings are based on a short timeframe, they highlight that falling costs and improved efficiency in AI token production could continue to boost usage and revenue in the AI industry.
