Alibaba (BABA) Cloud Block Cuts AI Model Prices Up to 85%

Alibaba is slashing the prices of its large language models by up to 85%, the Chinese tech giant announced on Tuesday.

The cloud computing unit of Hangzhou-based e-commerce company Alibaba Cloud said in a WeChat message that it is offering a price cut for its Qwen-VL visual language model, which is designed to perceive and understand both 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.

Still, the price cuts show how the race is intensifying among China’s tech giants to win more business for their nascent artificial intelligence products.

Major Chinese technology companies, including Alibaba, Tencent, Baidu, JD.comHuawei and TikTok parent company Bytedance have launched their own big language models over the past 18 months in an effort to capitalize on the hype surrounding the technology.

This isn’t the first time Alibaba has announced price cuts to encourage businesses to use its AI products. In February, the company named after 55% price reduction announced on a wide range of major cloud products. Most recently, in May, the company reduced the prices of its Qwen AI model by as much as 97% in an attempt to increase demand.

Large language models, or LLM for short, are artificial intelligence models that are trained on massive amounts of data to generate human-like responses to user queries and prompts. They are the basis for today’s generative artificial intelligence systems, such as the popular ChatGPT chatbot supported by Microsoft.

In Alibaba’s case, the company is focusing its efforts on LLMs in the enterprise segment rather than launching a consumer AI chatbot like OpenAI’s ChatGPT. In May, the company said its Qwen models had been deployed to more than 90,000 enterprise users.