Alibaba Plans Major Discounts on AI Large Language Models

Chinese tech giant Alibaba is reportedly slashing prices on its AI large language models.

Those markdowns are as high as 85%, CNBC reported Tuesday (Dec. 31), citing a WeChat post from the company’s cloud computing unit. The cuts involve Alibaba’s visual language model, Qwen-VL, created to perceive and understand both texts and images.

The report notes that the discounts illustrate the intensifying race among Chinese tech companies to capture new business for their artificial intelligence (AI) products.

In addition to Alibaba, tech giants like Tencent, Baidu, JD.com, Huawei and ByteDance have all introduced their own large language models (LLMs), AI models trained on massive amounts of data in an effort to generate human-like replies.

But unlike popular consumer AI models like OpenAI’s ChatGPT, Alibaba is focusing its LLM operations on enterprises, the report adds.

In Alibaba’s case, the company is focusing its LLM efforts on the enterprise segment rather than launching a consumer AI chatbot like OpenAI’s ChatGPT. In May, Alibaba announced its Qwen models have been deployed by more than 90,000 enterprise customers.

As PYMNTS wrote earlier this year, Chinese companies’ markdowns on AI models have reshaped the global artificial intelligence landscape.

“As prices plummet, businesses worldwide could gain unprecedented access to advanced AI tools, potentially revolutionizing commerce across industries,” that report said.

Experts, PYMNTS added, argue the shift could democratize AI capabilities, letting smaller startups compete with massive tech companies, and allowing traditional businesses to overhaul their operations with state-of-the-art technology.

“We will see significantly more competitiveness since much VC investment is going towards ‘picks-and-shovels’ AI technologies, and we should see more global pricing wars, which will be good,” Nick Rioux, co-founder and CTO of AI company Labviva, told PYMNTS.

“When market forces impact technology innovation, we can create more use cases for a broader, more diverse set of applications. This is good and relatively unexpected when looking at how China has managed technological governance in the past.”

PYMNTS also explored AI efforts by Alibaba and other tech firms in a report Tuesday on the transformative year the technology has just experienced.

“The drive for more capable systems continues into 2025,” that report said. “Competition among tech giants has accelerated development, pushing boundaries in machine reasoning and practical applications. The next wave of innovation may determine which approaches — and which companies — shape the future of this technology.”