China’s leading internet company, Tencent, and artificial intelligence firm, iFlytek, announced significant price cuts for their large-language models (LLMs) on Wednesday, intensifying the ongoing price war among the country’s top tech firms. This move follows similar actions by other major players in the industry, reflecting a competitive push to dominate the generative AI market in China.
Tencent’s cloud division revealed that the “lite” version of its LLM, Hunyuan, is now free to use. The prices for more advanced versions of Hunyuan have been reduced by 50% to 88%, making it more accessible to a broader range of users. Just hours before Tencent’s announcement, iFlytek disclosed that its “Spark” LLM is either free or up to five times cheaper than competing products.
This aggressive pricing strategy comes on the heels of similar moves by Alibaba’s cloud unit and search engine giant Baidu, both of which slashed the prices of their LLMs on Tuesday. Bytedance, another major Chinese tech company, also reduced its LLM prices last week. These reductions signify a rapidly escalating price competition among China’s tech giants.
In September, Tencent and iFlytek introduced ChatGPT-like products, marking their entry into the fierce competition among Chinese tech firms aiming to be the leader in generative AI. A Tencent executive described this intense competition as “a war of hundred models,” highlighting the scale and ambition of these companies.
At the time of their launch, both Tencent and iFlytek claimed that their LLMs outperformed OpenAI’s ChatGPT in certain tasks. ChatGPT, developed by the U.S.-based company OpenAI, was first introduced in late 2022 and has set a benchmark for AI chatbots globally.
iFlytek, which is headquartered in Hefei and renowned for its voice recognition technology, announced that Spark Lite would be available for free to the public. Meanwhile, Spark Pro/Max is priced at only 0.21 yuan (less than 3 cents) per 10,000 tokens, significantly undercutting competitors. This pricing strategy positions Spark Pro/Max as an attractive option for users seeking cost-effective AI solutions.
The new pricing by iFlytek is remarkably lower than the 1.2 yuan per 10,000 tokens charged by Baidu’s Ernie 4.0 and Alibaba’s Tongyi Qwen-Max. In comparison, Tencent’s Hunyuan Pro ranges from 0.2 to 0.9 yuan per 10,000 tokens. To illustrate the affordability, iFlytek stated that 2.1 yuan ($0.29) would suffice for Spark Max to generate the entirety of Yu Hua’s popular novel “To Live,” showcasing the model’s efficiency and cost-effectiveness.