OpenAI, Anthropic cut AI model costs as price-performance race intensifies

The economics of on-premises AI in question

Lower API costs improve the economics of consuming AI via cloud platforms, particularly for workloads such as coding agents and enterprise automation.

However, there’s still a case for private or hybrid deployments, Dai said, citing data sovereignty, security, and intellectual property requirements.

“Lower inference costs improve the economics of API consumption, but they do not eliminate demand for private and hybrid AI,” he said; enterprises are maintaining “optionality through hybrid architectures and selective infrastructure ownership.”