Home Science Technology Price Reductions by Chinese Tech Giants on Language Models Fueling AI Chatbots

Price Reductions by Chinese Tech Giants on Language Models Fueling AI Chatbots

Chinese Tech Giants
Chinese Tech Giants

On Tuesday, Chinese tech giants Alibaba and Baidu initiated significant price reductions on large-language models (LLMs) utilized in generative artificial intelligence products, intensifying a price war within the cloud computing sector in China.

Alibaba’s cloud division announced price cuts of up to 97% on its Tongyi Qwen LLMs range. For example, the Qwen-Long model will now cost only 0.0005 yuan per 1,000 tokens, down from 0.02 yuan per 1,000 tokens prior to the reduction.

Shortly after, Baidu followed suit by announcing that its Ernie Speed and Ernie Lite models would be free for all business users, marking a notable shift in pricing strategy.

The ongoing price war in China’s cloud computing industry has prompted Alibaba and Tencent to recently lower prices on their cloud computing services. This trend has now extended to the large-language models powering AI chatbots, potentially impacting profit margins for companies in the sector.

Baidu’s Ernie Lite and Ernie Speed models, introduced in March, were previously subject to charges for corporate users. However, with the latest announcement, these models are now offered free of charge.

Last week, Bytedance announced a substantial reduction in pricing for its Doubao LLMs, positioning its main model at 99.3% below the industry average for business users.

Chinese developers of large-language models have primarily targeted businesses for monetization, but there is a growing trend toward catering to individual users as well. Moonshot, a Chinese startup, recently introduced a tipping feature allowing businesses and individuals to prioritize their usage of chatbot services for a fee.

Baidu notably became the first company in China to offer its LLM products to paying consumers, with a subscription fee of 59 yuan per month for access to its most advanced Ernie 4 model.

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