2025 Guide: How Much Does OpenAI’s o3 Model Cost Per Generation Explained

The cost of using OpenAI’s o3 AI model largely depends on the number of tokens processed during input and output. Tokens are essentially chunks of text, approximating words, and their usage reflects the model’s compute intensity and advanced capabilities.

Pricing Breakdown of o3 Model

OpenAI charges for the o3 model based on the tokens consumed during input and output. As of mid-2025, after a significant price reduction, the pricing structure is as follows:

Input tokens: $2.00 per 1 million tokens
Output tokens: $8.00 per 1 million tokens

This represents an 80% reduction from previous rates of $10 and $40 per million tokens for input and output, respectively. This pricing update makes the o3 model more accessible for large-scale deployment while preserving its high-level reasoning capabilities.

Cost Implications for Generation

Each generation involves:

Processing input tokens: The model processes the text of your prompt to understand it.
Generating output tokens: The model generates a response based on the input.

The total cost per generation is directly proportional to the number of tokens involved. For example:

Input: If the input consists of 1,000 tokens, the cost is calculated as: 1,0001,000,000×2=0.002 USD\frac{1,000}{1,000,000} \times 2 = 0.002 \text{ USD}1,000,0001,000×2=0.002 USD
Output: If the output consists of 1,000 tokens, the cost is calculated as: 1,0001,000,000×8=0.008 USD\frac{1,000}{1,000,000} \times 8 = 0.008 \text{ USD}1,000,0001,000×8=0.008 USD

Thus, the total cost per generation for 1,000 input tokens and 1,000 output tokens is: Total cost=0.002+0.008=0.01 USD\text{Total cost} = 0.002 + 0.008 = 0.01 \text{ USD}Total cost=0.002+0.008=0.01 USD

In summary, more complex or longer prompts and responses will increase the token usage and the cost accordingly.

Comparison with Other Models

When comparing the o3 model to other OpenAI models like GPT-4 or GPT-3.5 Turbo, the o3 model has a higher cost due to its advanced reasoning capabilities and larger context window (up to 200,000 tokens).

GPT-4:
- Input tokens: $30 per million tokens
- Output tokens: $60 per million tokens
- Smaller context window compared to o3.
o3-mini:
- A cheaper alternative to the full o3 model, but with reduced capability.

Access via Subscription and API

Users can access the o3 model via:

OpenAI’s API: Pay-as-you-go usage.
ChatGPT Subscription Tiers: Access is available for Plus, Pro, and Team users.

Additionally, o3-mini and o3-pro variants provide different performance and cost options, allowing users to balance the trade-off between cost and performance.

Cost Optimization and Usage Strategy

To manage costs effectively, users can optimize the following:

Prompt length: Shorter prompts will reduce the number of input tokens.
Output size: Limiting the length of the response can minimize output token usage.
o3-mini: Use this variant for less demanding tasks to save on costs.
Flex processing mode: This option offers further discounts on token rates for users seeking more cost-effective processing.

Understanding token consumption patterns and implementing these strategies can help in budgeting and scaling AI applications more efficiently.