News30 Sept 2024• 4 min read

OpenAI Announces GPT-4 Turbo Price Drop: Impact on Agent Costs

OpenAI reduces GPT-4 Turbo pricing by 50% -cost analysis for AI agents and ROI recalculation for automation workflows.

MB
Max Beech
Head of Content

The News: OpenAI reduced GPT-4 Turbo pricing from £0.02/1K input tokens to £0.01/1K (50% reduction). Output tokens: £0.06 → £0.03.

Cost Impact on Agents:

Customer support agent (1,000 tickets/month):

  • Old cost: £36/month
  • New cost: £18/month
  • Savings: £18/month (£216/year)

Sales lead qualification (5,000 leads/month):

  • Old cost: £180/month
  • New cost: £90/month
  • Savings: £90/month (£1,080/year)

ROI Recalculation:

Before price drop:

  • Agent build cost: £20K
  • Monthly API cost: £180
  • Annual value: £45K (time saved)
  • Payback: 5.3 months

After price drop:

  • Build cost: £20K (unchanged)
  • Monthly API cost: £90
  • Annual value: £45K
  • Payback: 4.9 months (8% faster)

Strategic Implications:

1. Makes GPT-4 competitive with Claude 3.5 Previous: Claude 3.5 was 3x cheaper (£0.003 vs £0.01) Now: Claude 3.5 still cheaper but gap narrowed to 3.3x

2. Enables broader GPT-4 adoption Teams previously using GPT-3.5 for cost can now afford GPT-4 Turbo for better accuracy.

3. Model tiering still matters Even at new pricing, using GPT-3.5 for simple tasks + GPT-4 for complex saves additional 30-40%.

What to Do:

If currently using GPT-3.5: Test GPT-4 Turbo -accuracy gain may justify 10x cost (still only £0.01 vs £0.001).

If using Claude: Continue unless you need specific GPT-4 capabilities (Claude still cheaper).

If building new agent: Start with GPT-4 Turbo as baseline, no longer need to default to cheaper models.

Sources:

  • OpenAI Pricing Page