Alibaba’s Cloud Unit (BABA) Cuts the Prices of AI Models by Up to 85%

Alibaba The Chinese tech giant announced on Tuesday that it will cut the prices of its large language models by up to 85%.

The cloud computing division of the Hangzhou-based e-commerce company, Alibaba Cloud, said in a WeChat post that it is offering price cuts on a visual language model, Qwen-VL, designed to perceive and understand text and images.

Alibaba shares did not move much after the announcement, closing 0.5% higher on the final trading day of the year in Hong Kong.

However, the price cuts show just how fierce the race is between China’s tech giants to win more business for their emerging AI products.

Major Chinese technology companies including Alibaba, Tencent, Baidu, JD.comBoth Huawei and TikTok parent company Bytedance have launched large language models of their own over the past 18 months, looking to capitalize on the hype surrounding the technology.

This is not the first time Alibaba has announced price cuts to incentivize companies to use its AI products. In February the company Announce price discounts of up to 55% On a wide range of core cloud products. More recently, in May, the company reduced prices on its Qwen AI model up to 97% In an attempt to boost demand.

Large language models, or LLMs for short, are artificial intelligence models that are trained on massive amounts of data to generate human responses to user queries and prompts. It is the cornerstone of today’s generative AI systems, such as the popular chatbot ChatGPT powered by Microsoft OpenAI.

In Alibaba’s case, the company is focusing its LLM efforts on the enterprise sector rather than launching a consumer AI chatbot like OpenAI’s ChatGPT. In May, the company said its Qwen templates had been deployed by more than 90,000 enterprise users.