Chinese tech giants Alibaba and Baidu on Tuesday cut the prices of large-scale language models (LLMs) used to power generative artificial intelligence products, as a price war in the cloud computing sector heats up in China.
Alibaba’s cloud division has announced price cuts of up to 97 percent on a range of its Tongyi Qwen LLMs. Its Qwen-Long model, for example, will cost just CNY 0.0005 per 1,000 tokens – or data units processed by LLM – after the price cut, down from CNY 0.02 per 1,000 tokens.
It was soon followed by Baidu, which announced a few hours later that its Ernie Speed and Ernie Lite models will be free for all business users.
A price war in China’s cloud computing space has been going on 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 hit debut of US OpenAI’s ChatGPT in late 2022.
A price war in China’s cloud computing space has now hit the big language models that power those chatbots, threatening to squeeze the companies’ profit margins.
Baidu’s Ernie Lite and Ernie Speed were released in March and by Tuesday corporate users were paying to use them.
Bytedance announced last week that the main model of its Doubao LLMs will be priced 99.3% lower than 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 favor the use of their 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 most advanced Ernie 4 model.
© Thomson Reuters 2024
