GPT-4o API Costs Dropped 50% - How to Recalculate Your AI Budget

OpenAI has cut prices on its frontier models again. If you're running any production workload on the API, your cost assumptions from six months ago are probably stale. The Real Impact of a Pricing Halving A 50% price cut sounds like pure good news, but it changes the calculus on decisions you already made. Projects you shelved because the token costs didn't pencil out deserve a second look. Architectures you built around cheaper, less capable models to save money may now be false economies - the cost gap between "good enough" and "best available" just got smaller. The more interesting shift is for teams running retrieval-augmented generation (RAG) pipelines - systems that pull relevant documents from a database at query time and feed them into the model as context. RAG workflows tend to be token-heavy because every retrieved chunk counts against your input token bill. At the old pricing, teams were aggressively trimming context windows and limiting retrieved chunks to stay