Let the AI price wars begin. OpenAI has just fired a veritable volley across the bow of China's growing number of AI labs, sacrificing its sky-high margins to try to starve the budding open-weight AI economy.

OpenAI has just slashed the token-based pricing for GPT-5.6 Luna by 80 percent, with input tokens now priced at just $0.2 per 1 million from their earlier perch at $1, and output tokens priced at just $1.20 per 1 million vs. the earlier price of $6.

With these pricing cuts, OpenAI's GPT-5.6 Luna now gives the biggest bang for your buck, eclipsing even the relative attractiveness of DeepSeek's V4 Pro model.

Of course, this comes as China's open-weight models appear to be going in the opposite direction, with Moonshot having priced the Kimi K3 at $3 per 1 million of input tokens and a whopping $15 for every 1 million of output tokens.

With around 3GW of dedicated inference-related compute running on NVIDIA's GPUs, OpenAI had quite a lot of room heretofore to implement these cuts. It also has around 2GW of training compute.

In contrast, China's AI labs are probably running with just around 500MW of inference-related compute , that too made up of older NVIDIA GPUs as well as local ones from Huawei.

Even so, one should never bet against China in a pricing war. And so, we now wait for China's response to OpenAI's aggressive gambit.

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