Chinese tech giants Alibaba, Baidu, Tencent, and iFlytek are engaged in a fierce price war in the AI sector, specifically focusing on their large-language models (LLMs) for AI chatbots.

Alibaba Cloud's Tongyi Qwen LLMs have seen a 97% price cut, prompting other companies to lower prices as well.

ByteDance's Doubao Pro model is now priced at an incredibly low 0.0008 yuan per 1,000 tokens.

Baidu is offering free copies of its Ernie Speed and Ernie Lite models to corporate users.

Tencent now provides a free 'lite' version of its LLM, and iFlytek's 'Spark' LLM is either free or significantly cheaper than its rivals.

iFlytek's Spark Lite is available for public use at no cost, while Spark Pro/Max is priced at only 0.21 yuan per 10,000 tokens, making it five times cheaper than Baidu and Alibaba's offerings.

Tencent has reduced prices of its high-performance LLM versions by 50% to 88%.

The price war began after the introduction of ChatGPT-like products by Tencent and iFlytek in September 2023.

This competition is impacting businesses that rely on LLMs for AI chatbot services and is also attracting individual users.

Chinese companies are vying to outperform U.S.-based OpenAI's ChatGPT and make AI technology more accessible with significant cost savings for users.