BEIJING, May 21 Reuters Chinese tech giants Alibaba and Baidu slashed prices on Tuesday of largelanguage models LLMs used to power generative artificial intelligence products, as a price war in the cloud computing sector heats up in China.

Alibaba39;s cloud unit announced price cuts of up to 97 on a range of its Tongyi Qwen LLMs. Its QwenLong model, for instance, will cost only 0.0005 yuan per 1,000 tokens or units of data processed by the LLM after the price cut, down from 0.02 yuan per 1,000 tokens.

It was quickly followed by Baidu, which hours later announced that its Ernie Speed and Ernie Lite models would be free for all business users.

A price war in China39;s cloud computing space has been ongoing for the past few months, with Alibaba and Tencent recently lowering prices of their cloud computing services.

Many Chinese cloud vendors have relied on AI chatbot services to boost sales, after China saw a wave of investment in large language models in response to the hit debut of U.S.based OpenAI39;s ChatGPT in late 2022.

The price war in China39;s cloud computing space has now hit the largelanguage models that power these chatbots, threatening to lower companies39; profit margins.

Baidu39;s Ernie Lite and Ernie Speed were released in March and until Tuesday corporate customers paid to use them.

Bytedance announced last week that the main model of its Doubao LLMs would be priced 99.3 lower than the industry average for business users.

Chinese LLM developers…