Anthropic announced that its new model, Haiku 5.5, is “75% cheaper on average”. I looked into what that means.
What you pay for AI is the price of one token times how many tokens a task uses. This time it is mainly the price that dropped. Input went from $1 to $0.10 per million tokens, a 90% cut.
So why 75% and not 90%? The new tokenizer (the way text is split into tokens) produces slightly more tokens for the same text. Subtract that and the average saving comes to 75%.
Comparing per-token prices alone makes it look cheaper than it really is.
It is not that the model got smarter, stopped searching the web, used fewer tokens and so became cheaper. Search is one of the tools a model uses, and it has nothing to do with this price cut. On the benchmark, the score with tools is actually higher (57.4% vs 45.9%).
It is still a small model, though. For hard tasks, the larger models do better.