OpenAI slashes prices for Luna and Terra AI models as competition heats up

3 min readJul 31, 2026 01:17 PM IST OpenAI has lowered prices for its Luna and Terra AI models as competition intensifies and businesses seek lower-cost artificial intelligence services.(Image: Reuters)OpenAI slashed prices of its low- and mid-tier AI models on Thursday, a move that may intensify competition in the industry as U.S. companies battle cheaper Chinese rivals for customers increasingly wary of the technology’s ballooning costs. The ChatGPT maker lowered the cost of its smaller GPT-5.6 Luna model by 80 per cent and its mid-tier Terra by 20 per cent, while leaving the price of its biggest and flagship Sol model unchanged.The cuts show that rising cost ⁠scrutiny ​by businesses facing hefty AI bills is forcing American labs to rethink pricing. Many tech CEOs have also said in recen