Alibaba Group Holding Baba, Baidu Inc. Bidouand other companies in the industry are slashing the prices of their latest AI models in a price war to compete with domestic AI startups.
Chinese artificial intelligence startups include: Baichuan AIAs they compete for customers, they face stiff competition from tech giants offering significantly lower prices.
At a recent exhibition held in Shanghai, Baichuan AI showcased an advanced healthcare chatbot powered by its latest large-scale language model, Baichuan4.
According to Nikkei Asia, the startup claims that Baichuan4 outperforms OpenAI's GPT-4 in certain areas.
Read also: Chinese AI Leaders Alibaba and SenseTime Showcase Breakthrough Achievements at Shanghai Conference
Despite its advanced capabilities, Baichuan AI faces a tough market, with its price of 100 yuan ($13.75) per million tokens on par with OpenAI’s GPT-4 but higher than domestic alternatives.
Alibaba and Baidu have slashed prices to as low as 0.5 yuan, making it difficult for newcomers to compete.
The Chinese government is supporting AI development, approving 117 generative AI models and setting up an investment fund. Baichuan CEO Wang Xiaochuan sees the price war as a positive one, believing it will lead to wider adoption of AI technology.
However, Zhipu AI CEO Zhang Peng warned that excessive price cuts are unsustainable and could have a negative impact on the market in the long term.
Alibaba shares have fallen 19% over the past 12 months as the company struggles to unlock value through AI and e-commerce initiatives in a tough domestic market. Baidu has fallen more than 38%.
Investors can gain exposure to Alibaba shares in the following ways: Avantis Emerging Markets Equity ETF Averm and Global X Artificial Intelligence & Technology ETF AIQ.
Price Action: As of last check on Tuesday, BABA shares were trading at $73.97, up 0.64% in pre-market trading.
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Disclaimer: This content was produced in part with the help of AI tools and was reviewed and published by Benzinga editors.
Photo courtesy of Alibaba
