China tech giants step up AI price wars

Staff reporter and Bloomberg

China's tech giants stepped up a price war yesterday as Baidu (9888) scrapped charges on some of its ChatGPT-like products and Alibaba (9988) slashed prices by 97 percent on one of its artificial intelligence models.

Baidu AI Cloud said two major large language models or LLMs of its Ernie bot - Ernie Speed and Ernie Lite - have been opened to all free users.

Launched in March, the two models support context lengths between 8K and 128K, with 8K representing 8,192 tokens or 6,144 words in OpenAI's ChatGPT-4. Before scrapping the fee, Baidu charged 0.003 yuan (HK$0.00323) to 0.008 yuan per 1,000 tokens in these two models.

Baidu's move came as Alibaba Cloud slashed the price of Qwen-Long, a major model of its Tongyi Qianwen AI model, by 97 percent from 0.02 yuan to 0.00005 yuan per 1,000 input tokens. After the changes, 2 million tokens now cost 1 yuan only in Alibaba's product, equivalent to 0.25 percent of costs in ChatGPT-4, mainland media reported.

Moreover, Tongyi Qianwen's price cuts now cover nine close- and open-sources models.

Alibaba Cloud Intelligence's president of public cloud business Liu Weiguang said the price cuts aim to accelerate the development in AI applications.

Chinese tech giant ByteDance sparked the price war last week when it priced its Doubao LLM at 0.0008 yuan per 1,000 tokens.

ByteDance also reveled yesterday that it had acquired Chinese earphone maker Oladance for around US$50 million (HK$390 million), its latest step toward developing wearable devices that could become the next home for its tech after smartphones.

The prices cuts among China's AI players came after US giant OpenAI last week offered limited access to the latest GPT-4o to its free users, speeding up the trend of AI LLMs opening their sources.

In the world of mobile gaming, Tencent (0700) suspended Dungeon & Fighter Mobile within an hour of its Chinese debut because of unspecified server glitches, suggesting players flooded the online platform for one of 2024's most highly anticipated titles. The tech giant also repurchased 2.62 million shares involving HK$1 billion yesterday.

In other news, China's e-commerce giant JD.com (9618) plans to issue US$1.5 billion convertible senior notes due 2029, for share buyback programs, overseas business expansion and other purposes.