Alibaba Leverages Scale and Deep Pockets to Slash AI LLM Prices To Gain Market Share
Alibaba Group Holding
(NYSE:
BABA
) slashed its
large language model
prices by up to 85%, exhibiting intense domestic rivalry in the AI space.
Chinese companies remain engaged in a price war to win market share, prompting Alibaba Cloud to initiate discounts on its visual language model, Qwen-VL, CNBC
cites
from Alibaba’s WeChat post on Tuesday.
In February, the Chinese e-commerce juggernaut announced up to 55% discounts on its core cloud products.
Also Read:
Trump Administration to Challenge Social Media Censorship, Setting Stage for Conflict with EU Regulations
Jack Ma’s co-founded company slashed its Qwen AI model prices by up to 97% in May. Qwen-VL can interpret both texts and images.
Chinese tech firms, including Alibaba,
Tencent Holdings
(OTC:
TCEHY
),
Baidu Inc
(NASDAQ:
BIDU
), and
JD.com Inc
(NASDAQ:
JD
), launched their large language models.
In the third quarter,
Chinese companies spent
500 million yuan ($70.2 million) on promotional campaigns for AI applications. Alibaba committed 200 million yuan to promote the Quark cloud storage and search platform.
Alibaba remains focused on LLM efforts in the enterprise segment rather than launching a consumer AI chatbot like OpenAI’s ChatGPT. Alibaba Cloud Intelligence Group revenue grew by 7% to $4.22 billion
in the second quarter
.
Alibaba, Tencent, and Baidu disbursed $7 billion on AI infrastructure and processors in the first half of 2024.
Meanwhile,
Wedbush’s
Dan Ives expects the U.S. Big Techs, including
Meta Platforms Inc
(NASDAQ:
META
),
Microsoft Corp
(NASDAQ:
MSFT
), and
Amazon.Com Inc
(NASDAQ:
AMZN
), to spend $1 trillion on AI capital expenditure.
Alibaba Group Holding stock surged over 13% in the last 12 months. Investors can gain exposure to the stock through
Invesco Golden Dragon China ETF
(NASDAQ:
PGJ
) and
First Trust Nasdaq Artificial Intelligence and Robotics ETF
(NASDAQ:
ROBT
).
Price Action:
BABA stock traded lower by 1.04% at $83.91 premarket at the last check on Thursday.
Also Read:
Photo by Ascannio via Shutterstock
UNLOCKED: 5 NEW TRADES EVERY WEEK.
Click now to get top trade ideas daily
, plus unlimited access to cutting-edge tools and strategies to gain an edge in the markets.
Get the latest stock analysis from Benzinga?
This article
Alibaba Leverages Scale and Deep Pockets to Slash AI LLM Prices To Gain Market Share
originally appeared on
Benzinga.com
© 2025 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
