Alibaba Cloud Slashes AI Model Price

In a move that could reshape the competitive landscape in China’s AI services market, Alibaba Cloud has drastically reduced the price of its AI model, Qwen-Long. By cutting the price by 97%, Alibaba Cloud has made Qwen-Long the cheapest AI model globally.

Competitive Price Reductions

The price reduction, announced on May 21, 2024, comes on the heels of similar strategies implemented by ByteDance and anticipates free AI services offered by Baidu. The new pricing for Qwen-Long, a GPT-4-equivalent model, is now 0.05 Chinese cents per 1,000 tokens, approximately one-400th of the price of its competitor, GPT-4.

Baidu’s Response

Following Alibaba’s announcement, Baidu promptly responded by offering free services for its AI models, including its Ernie AI models. This swift reaction indicates the beginning of a potential price war in the Chinese AI market.

A Strategy to Regain Market Share

These price cuts form part of Alibaba’s broader strategy to regain market share and rejuvenate its cloud business amid internal restructuring. This approach mirrors strategies commonly employed by Chinese tech companies, aiming to establish a large user base to further AI technology advancement.

Global Impact and Future Developments

Alibaba’s aggressive pricing could have significant implications for the global AI services market, potentially affecting pricing strategies and market positioning worldwide. The company’s bold move is set to test the resilience and adaptability of competitors while positioning Alibaba Cloud as a leading player in the AI sector.