Tech Firms Mark Down AI Products to Compete With OpenAI and Anthropic
With their customers worn down by pricing shifts, software/cloud companies including Amazon, Microsoft and Figma are reportedly offering artificial intelligence (AI) discounts. That’s according to a report Tuesday (Sept. 22) by The Information, which said these markdowns are happening as customers are growing more selective about the AI tools they purchased after increasing spending on […] The…
Software and cloud companies such as Amazon, Microsoft, and Figma are reducing the price of their artificial intelligence (AI) products to compete with AI leaders OpenAI and Anthropic, according to a report from The Information published on September 22. The markdowns are a response to customers who are becoming more discerning in their AI tool purchases due to increased spending on products like Anthropic's Claude Code and OpenAI's Codex, and a shift by software providers to charge based on AI usage or output.
The shift to usage-based pricing can lead to higher costs, and software companies are also struggling to find ways to compete with OpenAI and Anthropic, who continue to improve their technology for automating tasks across sectors like finance and design. OpenAI has also been offering its own discounts, increasing pressure on traditional software providers.
Mike Trkay, the chief information officer at FICO, a credit scoring company, said his firm benefits from many software providers offering new AI capabilities at no additional cost during recent contract renewals. However, he declined to name the specific providers but stated that if a vendor does not heavily discount or bundle AI capabilities into their core license, FICO is unlikely to sign a contract, as they believe the AI tools are not worth the additional cost.
This follows a Bloomberg News report on September 21 that many software companies are turning to open-weight artificial intelligence models, including Chinese ones, due to the cost of proprietary models from American AI developers.
Open-weight models are generally less expensive and allow companies to create their own models using their own data, reducing the risk of outsourcing their technology to another company. However, PYMNTS reported in July that CFOs of middle-market companies are weighing the potential savings, flexibility, and control offered by open models against the added responsibility for managing the underlying infrastructure, which may include computing capacity, storage, cybersecurity controls, monitoring tools, and skilled employees.
The decision to adopt open models hinges on whether the potential benefits outweigh the increased responsibilities.
Written by urgent.news from PYMNTS's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
