fbpx

Type to search

Alibaba, Baidu Slash Price of Language Models Used With AI Bots

China’s biggest tech giants have intensified a price war that started in the cloud computing sector and has now spread to AI chatbots


The logo of Baidu's AI chatbot Ernie Bot is displayed near a screen showing the Baidu logo, in this illustration picture taken on June 28, 2023. Photo: Reuters
The logo of Baidu's AI chatbot Ernie Bot is displayed near a screen showing the Baidu logo. Photo: Reuters

 

Two of China’s biggest tech giants, Alibaba and Baidu, have intensified a price war in the country’s cloud computing sector.

Alibaba and Baidu slashed prices on Tuesday of large-language models (LLMs) used to power generative artificial intelligence (AI) chatbots.

Alibaba’s cloud unit announced price cuts on Tuesday of up to 97% on a range of its Tongyi Qwen LLMs. Its Qwen-Long model, for instance, will cost only 0.0005 yuan per 1,000 tokens – or units of data processed by the LLM – after the price cut, down from 0.02 yuan per 1,000 tokens.

 

ALSO SEE: US, EU Must Act Jointly on China’s Industrial Overcapacity: Yellen

 

That 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 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-based OpenAI’s ChatGPT in late 2022.

The price war in China’s cloud computing space has now hit the large-language models that power these chatbots, threatening to lower companies’ profit margins.

Baidu’s Ernie Lite and Ernie Speed were released in March and until Tuesday corporate customers paid to use them.

Bytedance announced last week that the main model of its Doubao LLMs would be priced 99.3% lower than the industry average for business users.

Chinese LLM developers have focused on charging businesses as a way to monetize their investments in LLMs.

Some have also begun targeting individual users. Chinese startup Moonshot recently launched a tipping feature, where business and individual users can pay to prioritize their use of its chatbot services.

Baidu was the first company in China to offer its LLM products to paying consumers, charging 59 yuan per month for those looking to use its most advanced Ernie 4 model.

 

  • Reuters with additional editing by Jim Pollard

 

ALSO SEE:

Baidu Says AI Chatbot ‘Ernie’ Has Had 200m Users

US Releases Detailed Rules For Export Curbs on AI Chips to China

TSMC Reaps Dividends of AI Boom as Revenue Beats Forecasts

Fears Rising on Impacts From Unrestrained AI Projects

China Ramps Up AI Push, Eyes $1.4tn Industry By 2030 – Xinhua

US Lawmakers’ Fury Over Huawei’s Intel AI Chip-Powered Laptop

China Bans Government Computers From Using Intel, AMD Chips: FT

US Curbs Set Off Sales, Tech Boom for China Chip Equipment Firms

Threat of More Chip Curbs Spurs Warnings on China Innovation

Jim Pollard

Jim Pollard is an Australian journalist based in Thailand since 1999. He worked for News Ltd papers in Sydney, Perth, London and Melbourne before travelling through SE Asia in the late 90s. He was a senior editor at The Nation for 17+ years.