Chinese tech giants Alibaba and Baidu on Tuesday cut the prices of large language models (LLMs) used to power generative artificial intelligence products, as a price war heats up in the cloud computing industry in China
Alibaba's cloud unit announced price cuts of up to 97 percent on a range of its Tongyi Qwen LLMs. Its Qwen-Long model, for example, will cost only CNY 0.0005 per 1,000 tokens, or data units processed by the LLM, after the price reduction, from CNY 0.02 per 1,000 tokens.
It was quickly followed by Baidu, which hours later announced that its Ernie Speed and Ernie Lite models would be free for all business users.
A price war in China's cloud computing space has been ongoing for the past few months, with Alibaba and Tencent recently lowering the prices of their cloud computing services.
Many Chinese cloud vendors have relied on AI chatbot services to boost sales, after China saw a wave of investment in large language models in response to the successful debut of OpenAI's ChatGPT based in the United States by the end of 2022.
The price war in China's cloud computing space has now affected the large language models that power these chatbots, threatening to squeeze the companies' profit margins.
Baidu's Ernie Lite and Ernie Speed were launched in March, and until Tuesday corporate customers paid to use them.
Bytedance announced last week that the flagship model of its LLM Doubao would be priced 99.3% below the industry average for business users.
Chinese LLM developers have focused on charging companies as a way to monetize their LLM investments.
Some have also started targeting individual users. Chinese startup Moonshot recently launched a tipping feature, where business and individual users can pay to prioritize the use of its chatbot services.
Baidu was the first company in China to offer its LLM products to paying consumers, charging 59 yuan a month for those who want to use its more advanced Ernie 4 model.
© Thomson Reuters 2024
