Anthropic’s Margin is OpenAI’s Opportunity
The Takeaway
- OpenAI offers deep discounts to lure Anthropic customers.
- Companies like Replit, DataCamp, Rippling shift spending to OpenAI
- Anthropic has retaken the lead among OpenRouter customers.
penAI’s efforts to undercut Anthropic on price are producing some results.
For instance, in May, Anthropic models powered 57% of the coding work of hundreds of engineers at Rippling, an HR software firm, while OpenAI models handled 16% of that work. Since then, the situation has reversed: 52% of the coding work is now handled by OpenAI models and 18% with Anthropic ones, as the company sought to cut costs and OpenAI proved cheaper, CEO Parker Conrad said.
“Anyone who is smart and sophisticated about this over the summer was trying to dramatically cut back from Anthropic and switch to other tools,” Conrad said, though he didn’t provide specifics.
Other sophisticated startups are making similar moves. Replit, a coding app, in recent months switched the majority of its AI spending to OpenAI from Anthropic after OpenAI offered a discount of more than 30% on its model prices as part of a contract worth more than $100 million annually, according to a person familiar with the situation. The startup had planned to stick with Anthropic, but Anthropic wouldn’t extend a discount it had previously provided to Replit unless the startup committed to a higher spending level, this person said. (Replit has publicly discussed shifting toward OpenAI but hasn’t disclosed the discount it is receiving nor the size of the contract.)
Investors will be looking closely at the impact of OpenAI and freely available open source models on Anthropic’s growth rate as it prepares for a blockbuster initial public offering as soon as next month. That rate slowed materially between the second and third quarters, though it was still extraordinarily high, at 45%. Another potential growth factor: Some of Anthropic’s biggest customers, including Cognition, Meta and Microsoft, are developing their own technologies and other alternatives to reduce spending on Claude.
In recent months, OpenAI appears to have drawn some customers from Anthropic by offering heavy discounts and other freebies for both its coding tool, Codex, and models that businesses can buy using application programming interfaces. The moves came after Anthropic, based on the strength of its models for coding, leapfrogged OpenAI in revenue during the second quarter and was about 50% bigger in terms of revenue over the summer.
OpenAI has said its enterprise revenue growth accelerated in recent months, though reliable data are hard to come by. Data from corporate spending software provider Ramp, which is used by many startups, shows Anthropic adoption surged in the second quarter and overtook OpenAI, as a percentage of Ramp customers, and the two are now neck and neck.
Higher Margins
Just as important as market share, Anthropic’s pricing power means it has had high gross profit margins compared to OpenAI. Anthropic spent just $5.6 billion on computing costs in the second quarter, including costs to develop new models, less than half the $11.5 billion in revenue it generated, The Information previously reported. Meanwhile, OpenAI previously projected it would spend significantly more on compute costs than the revenue it expects to generate this year. That means OpenAI’s discounts may be buying market share at the expense of already-negative margins.
Anthropic has continued to operate as if it isn’t threatened. While both Anthropic and archrival OpenAI provide discounts to customers that spend millions of dollars a year on their products, Anthropic has taken the unusual step of ending customers’ discounts once they hit usage limits in their contracts, The Information has reported. That policy appears to have cost Anthropic Replit’s business.
That has opened the door for OpenAI, which in recent months launched new models that were more competitive with Anthropic’s than its prior ones, many app developers say. Heavy users of such models say it’s a relative cinch to switch providers.
For instance, Replit took mere hours to make code changes to switch to OpenAI models from Anthropic’s, and just a few days to make the changes to its products, a faster turnaround than the time it took Replit to negotiate the earlier Anthropic contract, said the person with knowledge of the situation.
Anthropic Strikes Back
This dynamic also means Anthropic could win back some of the business it lost if it launches better models.
“We’re looking at an 80% to 90% decrease in costs,” Cornelissen said. “It’s huge.”
That may have already occurred. A month ago, OpenAI overtook Anthropic to become the most-used model provider to customers of OpenRouter, a service that businesses use to access different models through a single vendor. But after Anthropic launched its Claude Opus 5.5 model late last month, it retook the lead and was twice as popular as OpenAI models over the last week or so, OpenRouter said. (Anthropic is now preparing to release a model that reads users’ intentions better, while OpenAI is scrambling to release a powerful new flagship model without taking too many safety and security risks.)
In some cases, OpenAI is taking small bites of the budgets of loyal Anthropic customers. Vijay Rayapati, the CEO of Atomicwork, which automates IT support tickets, said his company has begun training new engineers to use Codex rather than Claude Code because of free credits it has received from both OpenAI and from its venture capital firm. That VC firm, Khosla Ventures, is a major OpenAI investor that offers such credits to startups in its investment portfolio, according to a person familiar with the situation.
While Atomicwork plans to spend around $2 million on Claude Code in the current fiscal year that ends January next year, Rayapati anticipates the startup will spend nearly $300,000 on Codex in the same period, compared to spending almost nothing on that product in the prior year.
OpenAI has been more available to help some customers use Codex effectively, some founders say. For example, one startup backed by Andreessen Horowitz, which has invested in OpenAI, says they are in a Slack group chat with OpenAI engineers and salespeople to help resolve issues with the coding tool when they arise. Anthropic did not make engineers available to the startup in a similar group message with sales reps from that company.
Huge Discounts
OpenAI recently has floated discounts higher than the 20% to 30% that some founders said they received on listed prices for its models. For example, Jonathan Cornelissen, CEO of workforce training firm DataCamp, which has about 200 employees and is a big spender on Anthropic models, says OpenAI has offered 40% off models that DataCamp uses internally to develop products. To get the discount, the startup must agree to also use Codex rather than a competing tool like OpenCode or Claude Code.
While weighing that offer, DataCamp is also negotiating to apply the same discount to OpenAI models—which are cheaper than Anthropic’s, before the discount—that power an application the startup sells to its customers, he said. Such a change would result in “significant” savings and higher gross margins, he said.
“We’re looking at an 80% to 90% decrease in costs,” Cornelissen said. “It’s huge.”
OpenAI is also trying to keep existing customers from looking at Claude. For instance, it recently allowed an American bank that has more than $7 billion in assets to double its ChatGPT accounts to 500 workers, without raising the annual contract cost of around $40,000, according to an executive at that firm. (That would amount to less than $7 per month per worker, an extraordinary discount from the typical price of more than $20 per month per worker.)
The firm’s marketing teams use ChatGPT to generate ads and its HR staffers use it to create job descriptions for new roles, but it was starting to consider switching some of that work to Claude before OpenAI sweetened its contract, the executive said.