OpenAI & Google's 2026 Declaration: The AI Price War Has Begun, and Now Is the Best Time to Jump In

OpenAI and Google have both launched budget-friendly AI plans almost simultaneously. Just months ago, both companies were doubling down on premium tiers like Pro and Ultra. That direction has now completely reversed.

Add China’s aggressive price disruption to the mix, and individual users are looking at an unprecedented window of opportunity.

Big Tech Is Now Competing Downward

Sam Altman said it himself at yesterday’s town hall: “By the end of 2027, you’ll be able to use today’s top-performing models at one-hundredth of the current price.”

The fact that OpenAI - a company that once focused exclusively on high-end plans - is now releasing budget tiers signals that subscriber growth at the top has started to plateau. Google launching its own Plus plan tells the same story. For users, this is unambiguously good news.

• Sam Altman’s Town Hall Livestream
• Town Hall Summary (if you don’t have time for the full video)

The Real Price Disruption Started in China

Backed by substantial government subsidies and low electricity costs, Chinese AI companies are reshaping the competitive landscape.

• Z.ai’s GLM-4.5 raised its performance bar while offering a $3/month lite plan that delivers a Claude Code-level experience
• Minimax briefly offered a $2/month plan right before its IPO, and its flagship M2.1 model performed remarkably well
• Moonshot AI’s Kimi 2.5, unveiled yesterday, enhanced parallel agent capabilities for running multiple tasks simultaneously - at an even lower price point

I subscribed to Kimi 2.5 immediately. The pattern is clear: American teams set the AI standards and frameworks, and Chinese companies rapidly train follow-on models that perform exceptionally well within those frameworks. For individual users, this kind of value is hard to pass up.

• Kimi 2.5 API Pricing

Anthropic Is Opening the Door to Free Users

Claude still maintains its Max subscriber-focused strategy, but as of yesterday, free users can now generate Excel spreadsheets, documents, presentations, and PDFs.

This looks like a dual-pronged approach: addressing the user-count gap while recognizing that the core paying audience - business professionals willing to spend $20 or more - remains the priority. A budget-tier plan from Anthropic, however, has yet to materialize.

Miss This Wave and the Gap Will Widen

Something Andrej Karpathy shared yesterday was striking.

In November, his workflow was 80% manual coding and 20% AI agents. By December, it had completely flipped - 80% agents, 20% manual edits. His entire working method transformed in a single month.

As Sam Altman put it, we’re heading toward an era where software is custom-generated for each user. Projects like Clawdbot (now Moltbot) - which went viral as non-developers set them up on their own - are living proof that this shift is already happening.

• Andrej Karpathy’s Jan 27 Tweet

Right Now - While AI Companies Focus on Mass Adoption - Is the Optimal Entry Point

The pivot from premium expansion to budget options means one thing: these companies want more users, fast. You should take advantage of that.

Start with a $2 - 3/month Chinese model as a secondary tool to build your intuition, then scale up to a $20 plan when you need it. Personally, I’ve been running Claude as my primary and Kimi as my secondary - and the combination has been surprisingly effective.

The curtain has risen on the AI price war, and those who capture this value first will be the ones who pull ahead.

And let me be direct: if you’re still using AI exclusively on free tiers, you will not catch up to those who pay - and that gap is only going to grow.