China's cloud computing sector sees massive AI model price cuts by Alibaba and Baidu: Here's why

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Key Points

Alibaba and Baidu, two of China's leading tech companies, dramatically reduced prices on Tuesday for their large-language models (LLMs) used in generative AI products, intensifying the ongoing price competition in the country's cloud computing sector..

Alibaba's cloud division announced substantial price cuts, slashing costs by up to 97 percent on various Tongyi Qwen LLMs..

For example, the Qwen-Long model's price dropped to just 0.0005 yuan per 1,000 tokens, a significant reduction from the previous rate of 0.02 yuan per 1,000 tokens..

Baidu quickly followed suit, declaring that its Ernie Speed and Ernie Lite models would be available at no cost for all business users, just hours after Alibaba's announcement..

The cloud computing market in China has seen a fierce price battle over recent months, with Alibaba and Tencent both reducing prices for their cloud services..

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