Alibaba Cloud slashes prices on LLM models amid intensifying Chinese AI race

Alibaba Cloud, the cloud computing arm of Alibaba Group Holding Ltd., announced Tuesday a dramatic price reduction of up to 85% for access to its most advanced large language models (LLMs). The move aims to boost adoption among Chinese enterprises as competition in the country's generative AI sector intensifies.

Record-low pricing

The announcement, first reported by the South China Morning Post, revealed that Alibaba Cloud’s Qwen-VL-Max model is now priced at just 0.003 yuan ($0.00041) per thousand tokens. This visual reasoning model, designed to process both text and image-based inputs, is now significantly cheaper than rival offerings from companies like ByteDance Ltd.

Also worth noting is the Qwen2-VL-Max outperforms OpenAI’s GPT-4V and Google’s Gemini Ultra in benchmarks like DocVQA and MathVista, establishing itself as a powerful model.

The burgeoning Chinese AI landscape

China’s biggest tech firms, including Tencent, Baidu, JD.com, Huawei, and ByteDance, have all launched an LLM. Over the past 18 months, more than 250 new LLMs have been introduced in the country for public use. Startups like DeepSeek, which recently launched the DeepSeek-V3 LLM with 671 billion parameters, are also raising the bar in the competitive landscape.

Alibaba Cloud’s focus is on Chinese enterprises, mirroring global interest in generative AI for productivity enhancements. According to the company, more than 90,000 enterprises have already downloaded its Qwen models.

A history of price cuts

This is not Alibaba’s first attempt to attract business through aggressive pricing. Earlier this year, the company slashed prices on its core cloud computing services by up to 55% and reduced the cost of its original Qwen-VL model by as much as 97%.