OpenAI Undermines Microsoft (MSFT) with Cheaper ChatGPT Plans

AI company OpenAI is now offering discounted prices on its enterprise version of ChatGPT, which has created tension with its major backer, Microsoft (MSFT). According to The Information, OpenAI offers these discounts to customers who agree to spend more on its other products, including services such as its API, Deep Research agent, or Codex coding assistant. The discounts typically range from 10% to 20%, depending on whether the customer signs a multi-year contract and bundles multiple services.

This strategy has helped OpenAI expand its customer base among businesses. Indeed, the company told investors that it aims to generate around $15 billion in ChatGPT-related revenue from enterprise clients by 2030. As of earlier this year, OpenAI reported $100 million in revenue from ChatGPT Enterprise and said it had surpassed three million paying business subscribers across ChatGPT Enterprise, Team, and Edu plans.

However, the discounted pricing is reportedly hurting Microsoft’s sales team, since it competes directly with OpenAI through its own AI offerings like Copilot. The partnership between the two companies has become increasingly strained, particularly after OpenAI acquired Windsurf, which has led to further conflict. Some OpenAI executives have even discussed the possibility of accusing Microsoft of anticompetitive practices, as deeper cracks form in the relationship.

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Turning to Wall Street, analysts have a Strong Buy consensus rating on MSFT stock based on 31 Buys and five Holds assigned in the last three months. Furthermore, the average MSFT price target of $518.77 implies 8.2% upside potential.

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