Alibaba Cloud cuts prices by up to 50% to remain competitive in fierce market

Alibaba’s cloud computing division, a major player in e-commerce and technology, is set to reduce its prices by up to 50% for its products and services, effective from Wednesday. This move is aimed at intensifying its competition in China’s cloud market. According to the company’s website, pricing for elastic computing services, which enable rapid expansion or reduction of processing, using both Arm and Intel-based chips will decrease by 15% to 20%. Similarly, services using Nvidia’s V100 and T4 graphics processing units will experience a drop between 41% and 47%.

The price cuts are one way for the company to attract more customers, said Zhang Yi, who tracks China’s cloud computing sector at research firm Canalys, though their actual impact will depend on the specific services clients buy.

Alibaba Cloud was one of China’s earliest domestic entrants into cloud computing, and currently supplies more than one-third of the sector in China.

However, in recent years the company has faced intensifying competition from Chinese carriers including China Unicom and China Telecom.

In late March Alibaba Group Holding Ltd announced a six-way breakup for its business divisions that would allow Alibaba Cloud and other units to raise funding independently.

Separately, Alibaba stated on Wednesday that more than 200,000 enterprises have requested beta testing for Tongyi Qianwen, the company’s AI-powered large language model.

Alibaba Cloud added that it will begin a partnership programme for Tongyi Qianwen, allowing select companies to retrain the model with their own intelligence to create industry-specific applications.

The seven companies comprising the program’s initial stage include subdivisions of China National Petroleum Corp and China International Capital Corp. (Reporting by Josh Horwitz in Shanghai, Liz Lee in Beijing and the Beijing Newsroom; Editing by Muralikumar Anantharaman and Kenneth Maxwell)