Free AI? China’s Tech Giants Offer No-Cost Language Models Amid Intense Competition

In China, where access to ChatGPT is blocked, Chinese companies are heating competition for free large language models (LLMs). Major IT companies like Baidu and Alibaba, followed by Tencent, have declared free-of-charge services, sparking a market share battle.

According to the Securities Times, Tencent announced it would make its flagship LLM product, Hunyuan-LITE, free. The Hunyuan pro, which applies trillion-unit parameters, has seen its cost per 1,000 tokens drop from $0.014 to $0.0042, a 70% decrease. Tokens refer to the units of text data recognized by the LLM.

Tencent and iFlytek, a Chinese AI company specializing in voice recognition, have opened their LLM Spark Lite for free. The Spark Pro has lowered its price to 0.21 yuan (less than 3 cents) per 10,000 tokens.

A week after TikTok operator ByteDance announced a price cut on the 15th, all major companies providing LLM services, including Alibaba, Baidu, Tencent, and iFlytek, participated in the price war. The absence of OpenAI’s ChatGPT in China, which is not much different from a monopoly, indicates fierce competition among Chinese companies to secure a foothold in the Chinese AI market.

In February last year, China blocked access to the U.S. OpenAI’s ChatGPT within its borders after it responded to questions about the Chinese government’s repression in Xinjiang as genocide, accusing it of spreading misinformation from the U.S. government. Since then, Chinese IT companies, including the Chinese search company Baidu, have launched AI chatbot services. Even Apple is considering installing Baidu’s chatbot, Erniebot, on the iPhone 16, which is set to launch in China this year.

Meanwhile, as the competition intensifies, major Chinese internet companies are freeing their LLM services, increasing the burden on Chinese AI startups. Kai-Fu Lee, the former president of Google China, founded the AI startup 01.AI and criticized the price reduction as a lose-lose situation. Wang Xiaochuan, CEO of Sogou Inc, stated that they would not participate in the price competition.

On the 21st, Kai-Fu Lee claimed that their developed Yi-Large has surpassed Meta’s Llama 3 and Antropics’ Claude 3 Sonnet. They argued that the gap between Chinese and American LLMs has significantly narrowed from 7–10 years to just six months. The price of the Yi-Large model is $2.76 per million tokens, and Kai-Fu Lee emphasized that they have no intention of lowering the price.