Amazon and Anthropic are undercutting OpenAI on tokens — and OpenAI is noticing

Amazon Web Services and Anthropic just announced new token pricing for Claude that puts OpenAI in the crosshairs. The deal, announced at re:Invent, gives AWS customers access to Claude at a fraction of what they'd pay through the standard API. The numbers are aggressive: Claude 3.5 Sonnet is now cheaper per token than GPT-4o, and Claude 3 Opus undercuts GPT-4 Turbo by a wide margin.

What makes this interesting is the wedge. Amazon is using Claude — Anthropic's model — to fight its own battle with OpenAI, the company that powers the most popular AI product on the market. AWS customers get Claude at a discount, OpenAI customers get GPT-4 at a premium, and the two are now directly competing on the same line item: tokens. It's a classic platform play. Amazon is the landlord, and it's putting a cheaper tenant in the building.

The pricing shift is a signal that the token wars are about to get real. Claude was always the better model for reasoning and long context, but it was priced like a luxury product. Now it's priced like a utility. For la gente who use AI tools every day — the translators, the paralegals, the small shop owners running inventory — this means the bills are about to come down.

Why this matters for us: the cheaper tokens go, the more tools get built on top of AI for everyday work, and the ones built for Brown working people finally get the infrastructure to survive.