OpenAI and Anthropic cut their LLM prices by up to 80% within a few months. Why?

OpenAI and Anthropic have significantly reduced the prices of their large language model (LLM) offerings. OpenAI has cut the price of GPT-5.6 Luna by 80% to $0.20 / $1.20 / $0.02, while Anthropic has made the temporary price cut for Claude Sonnet 5 permanent. OpenAI has also reduced the price of GPT-5.6 Sol by 20% to $4 / $20 / $0.40 for the next three months. Additionally, Anthropic has released Fable 5.1, which offers better benchmark performance and a 75% reduction in cache read cost. This price reduction is significant for developers using agents for coding, as cache read costs account for 96-99% of the total token expenditure and are hit 90-100% of the time.