Anthropic’s AI model struggles to gain users amid cheaper competition

Anthropic built one of the most capable AI models on the planet. Turns out, “most capable” and “most used” are two very different things. The company’s flagship Claude models are running into a wall of cheaper alternatives, particularly from Chinese competitors like DeepSeek, that deliver roughly comparable performance at prices that make Anthropic’s look like a luxury tax. The price gap is staggering Anthropic’s top-tier Fable 5 model runs between $10 and $50 per million tokens for input and output. DeepSeek’s equivalent offerings clock in at under $1 per million tokens. That’s not a modest discount. That’s a 10x to 50x difference in cost for what many users consider similar results. AI startup Lindy offers a clean case study in what happens when companies do the math. The company entirely transitioned its usage to DeepSeek, driven purely by the economics. This pattern is repeating across the industry. Enterprises are increasingly adopting “model routing” strategies, where they direct simple tasks to cheap models and reserve expensive ones for only the most complex operations. The net effect: less traffic and less revenue flowing to premium offerings like Anthropic’s flagship prod...