The total AI market is set to be worth $1,037bn by 2030. Credit: Ascannio/shutterstock

Alibaba, ByteDance and Baidu have slashed their large language model (LLM) prices causing a price war between Chinese LLM suppliers.

Alibaba announced that it would cut the price of its Tongyi Qwen LLMs by 97%. Following this, Baidu stated that it’s Ernie Speed and Light AI models would be available for free. 

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Ernie Speed and Light were released in March 2024 under a paid subscription of 59 Yuan a month. Baidu was the first Chinese company to offer paid LLMs. 

ByteDance also cut the price of its LLM last week before the cuts made by Alibaba and Baidu occurred. 

ByteDance’s LLM Doubao was priced 99% lower than other Chinese LLMs available on the market following the price cut. 

Alibaba and Baidu have previously entered a price war over their cloud offerings in March 2024 after Alibaba halved the price of over 100 of its cloud products. 

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LLMs are used to power AI chatbots, made popular by the 2022 release of OpenAI’s ChatGPT. 

Research and analysis company GlobalData reported in its 2024 tech sentiment survey that generative AI was regarded as the most disruptive technology to businesses across a variety of industries. 

Over 10% of companies responded that they believed AI would significantly disrupt their business in the next 12 months, while a further 41% answered that AI had already began impacting their sector. 

By 2030, GlobalData forecasts the total AI market to be worth over $1,037bn achieving a CAGR of 39% from 2022. GlobalData predicts that generative AI would be the biggest segment of the AI market by 2030.