Max Woolf · 2026-10-25 · notable
Max Woolf — why OpenAI and Anthropic cut LLM prices by up to 80%
Max Woolf traces how OpenAI and Anthropic cut API prices by up to 80% between June and September 2026. He argues cheap open-weight models and many competing inference providers forced the cuts.
Frontier API prices fell fast in 2026, and Max Woolf says competition from open-weight models is the main reason.
What is it?
Max Woolf's essay 'OpenAI and Anthropic cut their LLM prices by up to 80% within a few months. Why?' lists every price change from June to September 2026. Examples include OpenAI cutting GPT-5.6 Luna by 80% on July 30 and Anthropic launching Claude Opus 5.5 at $4 / $20 per million tokens, a 40–60% total cost drop versus Opus 5.
How does it work?
The analysis focuses on cache reads, which Woolf says make up 96–99% of token spend in agentic coding. Because of that, a 75% cut to the cache-read price lowers the real cost of a coding agent by roughly 70–75%, even when the headline input and output prices stay the same.
Why does it matter?
Woolf argues models are now easy to swap through tools like OpenCode and OpenRouter, and that DeepSeek V4.1 Flash 1017 and Kimi K3.1 Pro offer close quality for much less. He expects prices to keep falling rather than rise, even as both labs prepare for IPOs. Vercel AI Gateway data he cites shows cost per token at 43.3% of its April 2026 level.
Who is it for?
developers and teams budgeting LLM API spend