Alibaba and Baidu trigger a price war in China’s cloud computing sector by drastically reducing prices on their AI models, signaling heightened competition and evolving monetization strategies in the industry.
21 May 2024 – In a bid to dominate the cloud computing market in China, tech giants Alibaba and Baidu have ignited a fierce price war by slashing prices on their large-language models (LLMs) used for generative artificial intelligence products. Alibaba’s cloud unit, leading the charge, announced staggering price reductions of up to 97% on its Tongyi Qwen LLMs, prompting a swift response from Baidu, which made its Ernie Speed and Ernie Lite models free for all business users. This aggressive competition reflects the intensifying battle in China’s cloud computing sector, driven by increased investment in LLMs and AI chatbot services, potentially reshaping monetization strategies and profit margins for companies in the industry.
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