Ayman Zaid
Alibaba (NYSE:BABA) has slashed prices of certain AI services by a staggering 97%, prompting a swift response from its competitor Baidu (NASDAQ:BIDU), as per a report by Bloomberg News.
Following this move, aside from Alibaba (BABA) experiencing a 2% drop, several other Chinese stocks, such as JD.Com (JD), Baidu (BIDU), and Bilibili (BILI), saw a decline of 4%, 3%, and 4% respectively.
Baidu Cloud declared on Tuesday that it would offer complimentary services based on its Ernie AI models, closely after Alibaba presented discounted deals on nine products developed using its massive language model, Tongyi Qianwen, states the report.
TikTok’s parent company, ByteDance (BDNCE), recently disclosed pricing for AI services, claiming them to be 99% lower than the Chinese industry standard, with Baidu’s Ernie and Alibaba’s Qwen serving as benchmarks.
This development signals the initiation of a price-driven battle in China’s expanding AI sector, which has been drawing billions in investments from startups and established firms like Tencent.
Back in April, Alibaba reduced prices for its cloud clients worldwide by up to 59%, navigating escalating competition to stave off competitors and lure AI developers. This marked the third instance the company had cut prices within a year.
Shortly after Alibaba’s move, JD.com also followed suit, introducing several discounts of its own.
The fourth-quarter revenue related to AI at Alibaba exhibited accelerated growth, consistently achieving triple-digit growth year-over-year. The Chinese e-commerce behemoth attributed the ability to slash prices to cost benefits stemming from its robust infrastructure scale and advanced technologies, enabling reductions across over 100 public cloud products in the final quarter.
Further Insights on Alibaba and Baidu
