Microsoft is pushing back on the cost of Anthropic's AI models, with the company's AI chief telling Bloomberg that Anthropic's pricing is simply too high. The tension is part of a broader shift in how Microsoft is thinking about AI economics across its product lineup.
According to reporting by Ina Fried at Axios, Microsoft is moving its enterprise AI tool Copilot Cowork to usage-based pricing as it expands access to more business customers. The company is also weighing a Microsoft-hosted version of DeepSeek, the Chinese AI model that drew global attention earlier this year, as a lower-cost alternative to pricier frontier models.
The moves signal that Microsoft — despite its deep investment in OpenAI — is willing to shop around for cheaper AI horsepower when it suits the bottom line. Hosting DeepSeek internally would give Microsoft more control over costs and data handling while offering enterprise clients a budget-friendly tier.
Meanwhile, the broader AI industry is contending with what MarketWise describes as a potential price war brewing between Anthropic and OpenAI. The outlet warns that aggressive discounting could threaten the financial assumptions underpinning the AI boom, raising questions about whether AI companies can sustain heavy infrastructure spending if model prices keep falling.
Why it matters: When the company that bankrolled the AI revolution starts publicly calling its partners too expensive and eyeing cheaper rivals, it's a signal that the era of AI pricing power may already be cracking.