AI Is Becoming a Commodity, and That's a Problem for OpenAI and Anthropic

A handful of remarkable things that recently happened in the world of artificial intelligence all point in one direction: AI is becoming a widely available commodity.

First, the price of AI good enough to accomplish most everyday tasks has dropped precipitously. This is due to lightweight models that run in the cloud and on our devices, including new ones from Google, Apple and Chinese AI companies.

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Second, Meta Platforms showed the world it could potentially compete with the two leading AI labs, OpenAI and Anthropic, on their own turf, delivering high-performing models for the lucrative coding market.

And third, the current computing-power bottleneck appears set to ease as more data centers come online, and engineers figure out how to deliver AI more efficiently. For some applications, the supply of tokens -- the basic unit of AI use -- is catching up with demand.

These developments are great for the world. OpenAI Chief Executive Sam Altman hailed intelligence "too cheap to meter" as a goal just a year ago. And rather than taking all the jobs, AI might actually boost productivity of many workers and potentially reduce digital friction in our modern lives.

But is this good news for OpenAI and Anthropic? Poised for IPOs, both depend on maintaining a competitive edge over incumbent tech companies for future profitability. If AI models turn out to be a general-purpose technology like the automobile or electricity, what can they uniquely offer?

Competition and price wars

As of March, global consumer market share of OpenAI's ChatGPT, measured by unique users across mobile and web, fell below 50%, according to the market-intelligence firm Sensor Tower. That's mostly due to competition from Google Gemini and Anthropic's Claude. As for enterprise customers, Chinese AI models can now match the leading U.S. models by some measures, at far lower cost. On the OpenRouter leaderboard, which tracks business consumption of AI tokens on its platform, the top five models are all Chinese, and approximately 45% of all tracked tokens now flow through Chinese models.

Thinking Machines Lab, led by Mira Murati, former OpenAI chief technology officer, just released a free-to-use open-weights model it says will balance power and running cost. Translation: Who needs an AI Ferrari to get to work when the AI Honda Civic is right there?