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Alibaba Cloud, the cloud computing unit of the Chinese e-commerce giant Alibaba Group Holdings, announced on Tuesday that it was slashing prices on its large language models by up to 85%. The firm said it was giving its customers a New Year’s gift by cutting prices on the visual reasoning AI model, at a time when price wars continue to rage in China’s domestic AI services market. Alibaba implements price cut for the third time in 2024 According to South China Morning Post, Alibaba’s announcement, coming on the last day of 2024 is not the first, but the third AI price cut by the cloud unit this year alone. This also comes as competition heats up with similar initiatives implemented by TikTok parent company ByteDance as Chinese tech firms seek to attract users in a crowded market. The Hangzhou-based Alibaba’s cloud computing division made the announcement in a WeChat post its intentions to offer a price cut on Qwen-VL, its visual language model, which is perceived to understand both texts and images. Meanwhile, the e-commerce giant’s shares did not move that much and closed 0.5% higher on the final day of the trading of 2024 in Hong Kong. According to CNBC, the price cuts indicate how the race among China’s tech giants to win more business for their emerging AI products is intensifying. It remains to be seen if the pricing strategy will drive widespread adoption of tech firms’ products and services or if it just ignites a price war that will erode margins within the sector. According to Gurufocus, Alibaba’s strategy could be the masterstroke in this increasingly crowded AI space. The company wants to be the go-to supplier for firms that want to integrate AI into their operations without breaking the bank. Alibaba faces strong competition from peers…

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Filed under: News - @ December 31, 2024 11:26 pm