The AI margin collapse is gathering pace
The AI margin collapse is gathering pace September 29, 2026 · Martin Alderson I've written a lot about the economics of inference - especially with the advent of "good enough" open weights models. We're starting to see real price competition from all the frontier labs, even Anthropic who have been reticent to reduce prices. OpenAI fired the starting pistol The original 80% price cut at the very end of July on GPT-5.6 Luna certainly shook the market up, and indeed for the first time in recent memory ended up with a non open weights model briefly taking the top spot on OpenRouter.
- ▪The AI margin collapse is gathering pace September 29, 2026 · Martin Alderson I've written a lot about the economics of inference - especially with the advent of "good enough" open weights models.
- ▪We're starting to see real price competition from all the frontier labs, even Anthropic who have been reticent to reduce prices.
- ▪OpenAI fired the starting pistol The original 80% price cut at the very end of July on GPT-5.6 Luna certainly shook the market up, and indeed for the first time in recent memory ended up with a non open weights model briefly taking the top
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| Original publisher | Martin Alderson |
| Canonical URL | https://martinalderson.com/posts/ai-margin-collapse-gathering-pace/ |
| Publication time | Tue, 29 Sep 2026 18:46:26 +0000 |
| Retrieval time | 2026-09-29T18:52:31.858Z |
| Last seen | 2026-09-29T18:52:31.858Z |
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The AI margin collapse is gathering pace September 29, 2026 · Martin Alderson I've written a lot about the economics of inference - especially with the advent of "good enough" open weights models. We're starting to see real price competition from all the frontier labs, even Anthropic who have been reticent to reduce prices. Let's dive into the market dynamics. OpenAI fired the starting pistol The original 80% price cut at the very end of July on GPT-5.6 Luna certainly shook the market up, and indeed for the first time in recent memory ended up with a non open weights model briefly taking the top spot on OpenRouter. This was quickly followed by a further 50% price cut on GPT-6 Luna and GPT-6 Sol. In around 2 months, we've seen a 90% price cut in Luna and a 60% price cut in Sol.
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