Alibaba Cloud Slashes AI Model Prices by 85%

Alibaba Cloud is making substantial price cuts on its visual language model, Qwen-VL, reducing prices by up to 85%. This announcement was made as competition among Chinese technology giants accelerates, with several major firms like Tencent, Baidu, JD.com, Huawei, and Bytedance launching large language models (LLMs) over the past 18 months in a bid to capitalize on the burgeoning AI market.

Large language models are essential for modern generative AI systems, trained on vast datasets to produce humanlike text responses. Alibaba Cloud’s price reductions reflect its strategy to attract enterprise users to its AI offerings. Previously, in February, Alibaba had implemented price cuts up to 55% across various core cloud products, and more recently in May, it had reduced prices on its Qwen AI model by as much as 97% to stimulate demand.

Despite these aggressive pricing strategies, Alibaba’s stock showed limited reaction to the latest announcement, closing 0.5% higher in Hong Kong on the last trading day of the year.

The company’s current approach is directed towards serving the enterprise segment rather than consumer-oriented solutions like OpenAI’s ChatGPT. Alibaba reported that its Qwen models have already been deployed by over 90,000 enterprise users, indicating a strong uptake in the business sector. This emphasis on enterprise applications suggests a targeted strategy to build a robust business ecosystem around AI technologies in a competitive landscape.

Source: CNBC