OpenAI announces 80% price drop for o3, it’s most powerful reasoning model

Good news, AI developers!

OpenAI has announced a substantial price cut on o3, its flagship reasoning large language model (LMM), slashing costs by a whopping 80% for both input and output tokens.

(Recall tokens are the individual numeric strings that LLMs use to represent words, phrases, mathematical and coding strings, and other content. They are representations of the semantic constructions the model has learned through training, and in essence, are the LLMs’ native language. Most LLM providers offer their models through application programming interfaces or APIs that developers can build apps atop of or plug their external apps into, and most LLM providers charge them for the privilege at a cost per million tokens).

The update positions the model as a more accessible option for developers seeking advanced reasoning capabilities, and places OpenAI in more direct pricing competition with rival models such as Gemini 2 ...