Source URL: https://simonwillison.net/2025/Jun/10/o3-price-drop/
Source: Simon Willison’s Weblog
Title: o3 price drop
Feedly Summary: OpenAI just dropped the price of their o3 model by 80% – from $10/million input tokens and $40/million output tokens to just $2/million and $8/million for the very same model. This is in advance of the release of o3-pro which apparently is coming later today.
This is a pretty huge shake-up in LLM pricing. o3 is now priced the same as GPT 4.1, and slightly less than GPT-4o ($2.50/$10). It’s also less than Anthropic’s Claude Sonnet 4 ($3/$15) and Opus 4 ($15/$75) and sits in between Google’s Gemini 2.5 Pro for >200,00 tokens ($2.50/$15) and 2.5 Pro for <200,000 ($1.25/$10).
I’ve updated my llm-prices.com pricing calculator with the new rate.
How have they dropped the price so much? OpenAI's Adam Groth credits ongoing optimization work:
thanks to the engineers optimizing inferencing.
Tags: generative-ai, openai, o3, llm-pricing, ai, llms
AI Summary and Description: Yes
Summary: OpenAI has dramatically reduced the pricing of its o3 model by 80%, offering a significant shift in the landscape of large language model (LLM) pricing. This decision reflects ongoing optimization efforts aimed at making LLM technologies more accessible and competitive in the market.
Detailed Description: OpenAI's recent price cut for its o3 model is a pivotal development in the artificial intelligence industry, particularly within the generative AI and LLM sectors. Here are the main points of significance regarding this change:
- **Massive Price Reduction**: The pricing for the o3 model has decreased from $10 per million input tokens and $40 for output tokens to $2 per million input tokens and $8 for output tokens, marking an 80% reduction.
- **Market Comparison**: The new pricing positions o3 competitively alongside other models:
- It is now priced similarly to GPT-4.1 and slightly lower than GPT-4o ($2.50/$10).
- It also undercuts other significant players like Anthropic’s Claude Sonnet 4 and Opus 4.
- The pricing sits between Google’s Gemini 2.5 Pro plans, providing a strategic advantage in affordability.
- **Technological Optimization**: The reduction in pricing is attributed to ongoing optimization efforts in model inferencing, which suggest enhanced efficiency and a focus on reducing operational costs.
- **Implications for Professionals**: This pricing strategy could lead to:
- Increased adoption of LLM technologies in various applications.
- A competitive landscape that may encourage further innovations and optimizations in AI model development.
- A potential shift in budget allocations for companies considering the integration of generative AI into their operations.
- **Impact on LLM Tools**: The updated pricing has prompted the operator of the llm-prices.com calculator to adjust its offerings, indicating a broader impact on cost analysis tools in the industry.
This change demonstrates OpenAI's commitment to making advanced AI tools more accessible, potentially influencing both development and deployment strategies across sectors that leverage LLM capabilities.