It's more efficient with tools for one and the input cost is cheaper (which is where a lot of the cost is).

See comparison between GPT-5, 4.1, and o3 tool calling here: https://promptslice.com/share/b-2ap_rfjeJgIQsG.

That you can run Deepseek for 50 cents.

It seems like you might need less output tokens for the same quality of response though. One of their plots shows o3 needing ~14k tokens to get 69% on SWE-bench Verified, but GPT-5 needing only ~4k.

O3 has had some major price cuts since Gemini 2.5 Pro came out. At the time, o3 cost $10/Mtok in and $40/Mtok out. The big deal with Gemini 2.5 Pro was it had comparable quality to o3 at a fraction of the cost.

I'm not sure when they slashed the o3 pricing, but the GPT-5 pricing looks like they set it to be identical to Gemini 2.5 Pro.

If you scroll down on this page you can see what different models cost when 2.5 Pro was released: https://deepmind.google/models/gemini/pro/

pretty sure reduced cache input pricing is a pretty big deal for reasoning models, but im not positive