Trevor Noren(@trevornoren):FT: "Leading US AI labs such as OpenAI and Anthropic are releasing cheaper models as they fight to retain cost-conscious customers who are switching to cut-price alternatives from Chinese rivals. The price war comes as rising AI bills push companies to curb usage and seek cheaper models, helping Chinese developers including Moonshot and DeepSeek make inroads with users from Silicon Valley to Europe. OpenAI recently said that it was slashing prices for GPT-5.6 Luna, its “fastest and most affordable model”, by 80 per cent. Anthropic has launched Claude Opus 5, touting the system’s “frontier intelligence . . . at half the price” of Fable 5, the company’s most capable model. The moves have helped decrease prices that customers are paying for models from leading US labs by almost a quarter since mid-July." In my December report on "GenAI & Productivity" (https://t.co/kEx5Z4BbRz), I warned about the pricing power challenges faced by US hyperscalers: "While there’s a lot of speculative fear about how a single LLM could rise to dominance and what that could mean for economic, societal, and political stability, we believe the bigger concern for investors today is how relative model parity could compromise pricing power. Tech giants have thrived on monopolies and duopolies for a decade or more. Now, they’re in an LLM arms race where it’s unclear when or even if ever leadership will be sustainable." Since, my concern about the commoditization of AI has only intensified as Chinese models have risen to power. According to OpenRouter data, Chinese models accounted 4.4% of token usage by US companies in January. Today, that share is over 60%. Meanwhile, enterprise model router adoption has skyrocketed and frontier labs have been increasingly shifting from subscriptions to usage-based, metered billing, business models more akin to utilities than the per-seat models SaaS companies thrived on over the past decade. As RBC warned in July: “Oil, natural gas, and electricity are all important. Entire economies depend on them. But importance alone does not guarantee strong economics or durable profitability. When supply expands aggressively and is increasingly interchangeable, competitive forces tend to compress returns over time.” Far more to come in my next report! Learn about Sage Road Research here: https://t.co/Wgwz2xmY1y. Interested in subscribing? Message me. FT link:

2026.08.14 15:11

FT: "Leading US AI labs such as OpenAI and Anthropic are releasing cheaper models as they fight to retain cost-conscious customers who are switching to cut-price alternatives from Chinese rivals. The price war comes as rising AI bills push companies to curb usage and seek cheaper models, helping Chinese developers including Moonshot and DeepSeek make inroads with users from Silicon Valley to Europe. OpenAI recently said that it was slashing prices for GPT-5.6 Luna, its “fastest and most affordable model”, by 80 per cent. Anthropic has launched Claude Opus 5, touting the system’s “frontier intelligence . . . at half the price” of Fable 5, the company’s most capable model. The moves have helped decrease prices that customers are paying for models from leading US labs by almost a quarter since mid-July." In my December report on "GenAI & Productivity" ( I warned about the pricing power challenges faced by US hyperscalers: "While there’s a lot of speculative fear about how a single LLM could rise to dominance and what that could mean for economic, societal, and political stability, we believe the bigger concern for investors today is how relative model parity could compromise pricing power. Tech giants have thrived on monopolies and duopolies for a decade or more. Now, they’re in an LLM arms race where it’s unclear when or even if ever leadership will be sustainable." Since, my concern about the commoditization of AI has only intensified as Chinese models have risen to power. According to OpenRouter data, Chinese models accounted 4.4% of token usage by US companies in January. Today, that share is over 60%. Meanwhile, enterprise model router adoption has skyrocketed and frontier labs have been increasingly shifting from subscriptions to usage-based, metered billing, business models more akin to utilities than the per-seat models SaaS companies thrived on over the past decade. As RBC warned in July: “Oil, natural gas, and electricity are all important. Entire economies depend on them. But importance alone does not guarantee strong economics or durable profitability. When supply expands aggressively and is increasingly interchangeable, competitive forces tend to compress returns over time.” Far more to come in my next report! Learn about Sage Road Research here: Interested in subscribing? Message me. FT link:

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