Why OpenAI Might Slash Prices for Users

Summary

WSJ What’s News: "Why OpenAI Might Slash Prices for Users" (June 11, 2026)

Episode Overview

This episode digs into escalating AI infrastructure costs and how OpenAI’s rumored price cuts could reshape competition in the AI sector. The hosts and their guests discuss the financial pressures on businesses adopting AI, the backlash against strict AI guardrails, growing public resistance to new data centers, and global digital policy headlines. The episode also covers labor negotiations in the US auto industry and the kickoff of the 2026 FIFA World Cup amid persistent controversies.

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Key Discussion Points and Insights

1. OpenAI’s Potential Price Cuts & Industry Impact

• OpenAI is reportedly weighing significant reductions in what it charges for AI tokens, which are the units companies pay to use large language models like ChatGPT.

• The move anticipates similar price drops from rival Anthropic as both companies eye public listings and try to maintain revenue streams amidst enterprise pushback on skyrocketing AI bills.

• Corporate 'Sticker Shock': Executives from leading companies underscore how fast costs are rising, forcing a shift toward more efficient AI usage.

  • Notable Quote:

    “In the marketing space, we're using the very expensive models because we're doing Frontier reasoning, we're doing high resolution video and audio where there's no deflation, just cost increase. So this is the problem or the sticker shock that most companies haven't yet experienced but will...I think the Uber CTO went public recently and said he burned his entire 2026 token budget in four months.”
    — Cindy Rose, CEO of WPP (01:57)

• Pivot to Optimization: The focus is now on optimizing token consumption—finding ways to use advanced AI models more efficiently to control costs.

2. Anthropic’s Claude Fable Model: Guardrails and Backlash

• Anthropic’s new Claude Fable model debuted with heightened content restrictions, sparking complaints from AI researchers and developers.

• Pop-up messages redirect users away from sensitive topics (like bioweapons) to less capable models, but some safeguards were overly broad, blocking even benign technical queries in math or science.

• Users argued these “intense restrictions” amounted to gatekeeping and even suppressing open AI research, leading Anthropic to revise some of the guardrails after user outcry.

  • Notable Quote:

    “Anthropic said that it would degrade the quality of its responses about high end AI development intentionally…Users reacted with intense frustration. They said it was gatekeeping…and muddying just general AI research into the capability of Fable.”
    — Sam Scheckner, WSJ Tech Reporter (03:48)

3. Canada Moves to Ban Social Media for Teens

• The Safe Social Act would ban children under 16 from using platforms like Snapchat and Instagram, imposing hefty fines (up to 3% of global revenue) on non-compliant tech firms.
• Canada’s move follows similar digital age restrictions in Denmark, Sweden, and Australia, reflecting global tension between youth mental health advocates and tech companies.

4. Data Center Costs and Community Backlash

• As demand for AI grows, utility burdens from massive new data centers are becoming a flashpoint for communities and policymakers.

  • Bloom Energy CEO Perspective:
    K.R. Shreeter highlights that:

    • The power grid wasn’t designed to handle gigawatt-scale data centers, likening it to highway infrastructure where a few “super-users” can provoke public resentment.

    • Data centers aren’t built like traditional, job-creating factories. They demand huge energy but offer few local benefits, fueling opposition.

      • Notable Quote:

        “If one ratepayer was consuming all that power and everybody else was paying the tolls for that road, people got upset…So you need backup generators. Whereas if you're producing power on site, reliably modular…you don't need any of that backup. For all those reasons, the grid would be a terrible way to power a Data Center.”
        — K.R. Shreeter, Bloom Energy CEO (09:12, 11:55)

    • Bloom Energy’s on-site fuel cell solutions (with lower pollution) are pitched as preferable alternatives, but the CEO concedes there’s “nothing that’s NIMBY proof.”

  • Technical Notes:

    • Centralized AC-to-DC long-distance transmission leads to power loss.
    • Direct on-site generation is more efficient, reduces backup needs, and can use waste heat for cooling—critical for data centers.

5. Other Headlines

• Oracle’s Cloud Growth & Spending: Oracle’s cloud business surges, but huge investments in data center infrastructure ($70 billion in CAPEX for the coming year) are expected to pressure margins.

  • Notable Observation:

    “Anyone that thinks that these things are easy to operate is very confused.”
    — Luke Vargas & K.R. Shreeter (05:59-06:02)

• US Auto Strike Settlement: GM parts supplier DAUc reaches a tentative deal with striking UAW workers, moving towards restoring jobs and wages.

6. 2026 World Cup and FIFA Criticism

• The World Cup kicks off with Mexico vs. South Africa, but pre-tournament controversies (ticket prices, travel restrictions, geopolitical tensions) dominate the conversation.

• FIFA President’s Stance: Gianni Infantino insists the focus should shift to the sport itself, expressing gratitude to the US administration (particularly Donald Trump) for making the event possible.

  • Notable Quote:

    "Maybe sometimes it's also good to chill, relax."
    — Gianni Infantino, FIFA President (12:55)

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Timestamps of Key Segments

• 00:32 — Overview of AI pricing wars, Canada’s social media ban for teens, and data center power issues.
• 01:06 — OpenAI and Anthropic price strategies and enterprise AI sticker shock.
• 01:57 — WPP CEO Cindy Rose details soaring corporate AI costs.
• 02:34 — OpenAI IPO leak and Anthropic’s Claude Fable model backlash.
• 03:03 — Sam Scheckner on AI guardrail controversies.
• 04:53 — Canada’s proposed teen social media ban explained.
• 05:57 — Oracle’s data center investments and operational complexity.
• 07:23 — Bloom Energy CEO K.R. Shreeter on power grid limitations for AI infrastructure.
• 08:04 — Detailed breakdown of local opposition to data centers.
• 10:40 — Technical inefficiencies of powering data centers from the grid.
• 12:55 — FIFA President’s remarks ahead of the World Cup.

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Memorable Moments and Notable Quotes

• Cindy Rose (WPP CEO): “More agents than employees now and there's a lot of unbudgeted cost associated with it…pivot needs to be towards token consumption optimization.” (01:57)
• Sam Scheckner (WSJ): “Anthropic said that it would degrade the quality of its responses about high end AI development intentionally…” (03:48)
• K.R. Shreeter (Bloom Energy): “If one ratepayer was consuming all that power and everybody else was paying the tolls for that road, people got upset.” (09:12)
• Gianni Infantino (FIFA): “Maybe sometimes it's also good to chill, relax.” (12:55)

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Overall Tone & Takeaways

The episode takes a brisk, informative tone that mixes urgent industry concern with eye-opening quotes from top executives. It highlights that big tech's next act may be not just technological, but deeply economic and political—managing costs, infrastructure, and the shifting social contract around AI and privacy.

Listeners come away with a clear sense of the growing pains facing AI’s commercial adoption and how these are rippling out into regulatory, social, and even sporting arenas.

Transcript

[Podcast Host / Advertiser]

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[Luke Vargas]

OpenAI weighs major price cuts as businesses begin to scrutinize soaring AI bills Plus, Canada proposes banning social media for teens. And mounting opposition to data centers prompts a rapid rethink in how the industry sources its power.

[K.R. Shreeter]

The utility companies try to provide them the power, but remember, it's a freeway and a highway paid for by the ratepayer. And if one ratepayer was consuming all that power and everybody else was paying the tolls for that road, people got upset.

[Luke Vargas]

It's Thursday, June 11th. I'm Luke Vargas for the Wall Street Journal, and here is the AM edition of what's News, the top headlines and business stories moving your world Today, the war for AI customers is leading OpenAI to consider drastic price cuts. We are exclusively reporting that the ChatGPT maker is weighing significant cuts to what it charges for tokens the UN AI firms use to bill for their products, anticipating that similar cuts could be coming at rival Anthropic. The price war could be an early test of both companies. Revenue streams ahead of hotly anticipated public listings and comes as executives around the world begin to balk at the high prices for AI usage. Cindy Rose is the CEO of advertising giant WPP and had this to say at the WSJ Leadership Institute's CEO Council Summit in London.

[Cindy Rose]

In the marketing space, we're using the very expensive models because we're doing Frontier reasoning, we're doing high resolution video and audio where there's no deflation, just cost increase. So this is the problem or the sticker shock that most companies haven't yet experienced but will, I think the Uber CTO went public recently and said he burned his entire 2026 token budget in four months. Same at WPP. I've got more agents than employees now and there's a lot of unbudgeted cost associated with it. So now the pivot needs to be towards token consumption optimization, which is the next chapter.

[Luke Vargas]

OpenAI confidentially filed for an IPO earlier this week and we report that CEO Sam Altman told employees in a Slack message that the company plans to go public within the next year. Guardrails erected around Anthropic's next gen AI model are stirring a user backlash. Tech reporter Sam Scheckner told me that it didn't take long after Tuesday's release of Claude Fable for AI experts and researchers to start complaining about restrictions within the powerful model.

[Sam Scheckner]

The new model that Anthropic released Tuesday is an update to the Mythos model that the company first put out in April and said was too dangerous to release widely. And so what they did is they added pretty intense restrictions to what it can do to help mitigate those risks. And some users definitely reacted poorly to it.

[Luke Vargas]

Sam, some of these were very, you know, noticeable. You got a pop up saying, saying if you're prompting it on questions around bioweapons or cybersecurity, that said, you know, we're going to steer you now to a less capable model. Some users reported that the model is actually stricter than that and was blocking by benign topics like math or biology or chemistry. And yet there was a separate cohort very frustrated that some of the safeguards were not so obvious.

[Sam Scheckner]

Yeah, I think we've seen models sort of redirect conversations before. But what really rankled people, especially in the academic AI area and in the open source AI field, was that Anthropic said that it would degrade the quality of its responses about high end AI development intentionally to make it less useful for developers looking to build AI tools. The justification for this was national security and its own terms of service that you're not supposed to use the AI that way and that others who are not scrupulous might build AIs without the same restrictions that Anthropic builds. But you know, users reacted with intense frustration. They said it was gatekeeping, they were trying to harm potential competitors and muddying just general AI research into the capability of Fable and Anthropic actually reversed part of these safeguards after the outcry. And so instead of silently degrading Fable's ability to do high end AI research, it simply will tell users that it's not going to do that.

[Luke Vargas]

That was Journal tech reporter Sam Scheckner. And Canada is moving to block younger teens from social media. The Safe Social act would temporarily ban children under 16 from platforms like Snapchat and Meta's. Instagram and tech firms that fail to comply could face sweeping fines of up to 3% of their global revenue. The move comes amid a growing wave of age based digital restrictions, following in the footsteps of Denmark and Sweden, which have weighed similar actions, as well as Australia, which last year became the first nation to implement a strict social media ban. For under 16s. While advocates point to escalating youth mental health crises, critics and tech companies argue that the bans are counterproductive and easily bypassed. Oracle shares have slumped off hours despite surging cloud revenue. The company reported a 47% increase in its cloud infrastructure business to nearly $10 billion. But co CEO Clayton McGuirk also issued a blunt warning that the huge expenses for its data centers are likely to weigh on margins.

[K.R. Shreeter]

And then anyone that thinks that these

[Luke Vargas]

things are easy to operate is very confused.

[K.R. Shreeter]

You're not just buying a single rack

[Luke Vargas]

and putting it into your and your data hall.

[K.R. Shreeter]

These are extremely complex clusters that require constant care and feeding, constant maintenance across the network and the hardware itself.

[Luke Vargas]

Oracle is expecting a net cash outlay for capital expenditures of around $70 billion for the coming year, and striking UAW workers at GM parts supplier DAUc have reached a tentative agreement, potentially ending a 10 day walkout. The deal could return almost 1,000 employees to producing axles for GMs Chevy Silverado and GMC SIER pickups, though ratification isn't guaranteed. Workers have been pushing to raise the current $22 top hourly wage closer to the $29 they earn before recession era cuts. Coming up, can the World Cups kick off silence FIFA's critics and I'll speak to the CEO of Bloom Energy about how the company is navigating opposition to new data centers. That's after a short break.

[Podcast Host / Advertiser]

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[Luke Vargas]

Can the power grid keep up with AI? According to the CEO of Bloom Energy, which makes fuel cells that businesses can use to generate electricity on site, predominantly through natural gas, the answer is no, both practically and politically. As opposition to new data centers mounts in conversation at the WSJ Leadership Institute's CEO Council, I asked K.R. shreeter what to make of the rapid shift in public opinion about the AI buildout. A year ago we were seeing in Oval Office events announcements of new data centers. These were being talked about by the president as symbols of innovation and of job creation. Now the pitchforks are out.

[K.R. Shreeter]

They are out because people are worried about multiple things. The first thing is the grid simply cannot support gigawatt data centers. The grid was not built to be able to do that. The grid was a flywheel that was supposed to take care of a lot of retail customers. If you are one Single large customer that's going to suck up most of the electricity coming from a substation. Whether you are an aluminum smelter in the past, whether you're a glass making factory, they all depended on their own on site power. Bring your own power, right? So these big data centers today consume a lot more power than even those aluminum smelters. And for them to have naively thought that they can rely on the grid for that kind of power was wrong.

[Luke Vargas]

Doomed to fail.

[K.R. Shreeter]

Doomed to fail. And at some scale it was going to break. But even before that happened, the utility companies tried to provide them the power. But remember, it's a freeway and a highway paid for by the ratepayer. And if one ratepayer was consuming all that power and everybody else was paying the tolls for that road, people got upset.

[Luke Vargas]

You're not surprised about the public?

[K.R. Shreeter]

You shouldn't be surprised at all. Absolutely not. Absolutely not. So then you get to the next point of saying, bring your own power. But these data centers, unlike the aluminum smelters, are not built far away from people. They're built in cities and towns. Who wants a big power plant in their backyard immediately? Your property values are going to go down, the amount of air pollution is going to go up, the water usage is going to go up. And what is the benefit for the local community that's bringing that in? Not much, because it's not creating the thousands of jobs like an automotive plant would. For those reasons, you saw social unrest. When we bring a bloom unit there. We don't consume water, we don't burn the natural gas, so we don't create any air pollution.

[Luke Vargas]

And yet do you not risk being swept up in the broader pushback against AI infrastructure? Community says, I don't care how you're powering the data center, we just don't want it, period.

[K.R. Shreeter]

I don't think there's anything that's NIMBY proof. We are not NIMBY proof, okay? But if you want development, we are the best possible alternative that you have. Best possible choice you have. That's the first thing. The second thing is AI definitely accelerates our business, but our business was growing at 40% a year with us being a profitable company by providing on site

[Luke Vargas]

power, is there not a way to make the grid work for data centers

[K.R. Shreeter]

similar to if you just take a very large load like the AI loads of half a gigawatt gigawatts. Even if you can make it work, it's probably the most inefficient, worst way for you to be powering the data center, even if you can make it work, the reason is you're generating the power very far away. You know exactly where it's needed. Why are you using copper wires and transmitting all that power and losing power along the way? Second thing, you're converting a molecule to electricity. You generate some amount of heat. If that heat is right next to the point of use, like a data center, you can use that heat for cooling and the data centers require a lot of cooling. Instead. Here you waste that heat and then you use more electricity to do the cooling. Number three, the large power plants on the grid provide AC power. Alternating current is what that's called. Our chips use direct current or DC power at low voltage. We natively produce DC power at 800 volts to be able to supply directly to the racks. And this is where the future is. As long as you depend on a pole and wire, you're going to use backups because the pole and the wire is going to fail. That's called a power outage. Right? You're going to have that all the time. So you need backup generators. Whereas if you're producing power on site, reliably modular, modularly with fault tolerance, how we build it, you don't need any of that backup. For all those reasons, the grid would be a terrible way to power a Data Center.

[Luke Vargas]

K.R. sreeter is the founder, chairman and CEO of Bloom Energy. K.R. thanks for a great conversation.

[K.R. Shreeter]

Thank you so much.

[Luke Vargas]

To hear my full interview with KR Shreeter, check out the link we've left in our show notes. And finally, the World cup wait is over. The five week 104 match fiesta, jointly hosted by Canada, Mexico and the US is getting underway at 3pm Eastern today when Mexico faces off against South Africa. It's a kickoff that Journal sports editor Joshua Robinson says will test FIFA president Gianni Infantino's wish that pre tournament drama will end as soon as play starts.

[Joshua Robinson]

At Infantino's pre World cup press conference, most of the questions weren't about soccer. They were actually about the controversies leading into this tournament and namely high ticket prices, officials being turned away at the US border and the uncertainty around Iran, which is actively at war with the United States. Infantino's message, and I quote, maybe sometimes it's also good to chill, relax. I also asked him about his relationship with President Trump, which has been widely criticized because it appeared to politicize the World Cup. But Infantino, who has been cozying up to the Trump administration for close to a decade, had nothing but praise to lavish on the US President, he said at the World cup, would not have been possible without Trump.

[Luke Vargas]

The US Opener against Paraguay is set for tomorrow, while heavyweights Brazil, Germany and the Netherlands will enter the fray this weekend. And that's it for what's news for this Thursday morning. Today's show was produced by Hattie Moyer. Our supervising producer is Sandra Kilhoff, and I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.

[Podcast Host / Advertiser]

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