iFlytek Joins the Competitive AI Language Model Pricing Battle in China

In a recent development within China's tech industry, iFlytek, an artificial intelligence (AI) company, has thrown itself into an intensifying price competition among the nation's leading tech companies. This strategic move involves iFlytek reducing the cost for some versions of its advanced 'Spark' large-language model (LLM), either offering them for free or making them significantly cheaper—at a rate five times less than that of their rivals' similar offerings.

iFlytek's Aggressive Pricing Strategy

The pricing change from iFlytek came just a day after other tech heavyweights in China, such as Alibaba and Baidu, cut the prices of their respective LLMs, which are crucial for powering generative AI applications. This industry-wide price reduction had been seen the previous week with Bytedance also lowering its prices.

iFlytek is recognized for its voice-recognition technology and made waves in September with the launch of 'Spark', a ChatGPT-like product that the company claims outperformed ChatGPT 3.5 in Chinese language tasks and matched it in English performance by the following month.

Understanding iFlytek's Pricing

The Hefei-based company announced that its Spark Lite version would be free for public usage. In contrast, the Spark Pro/Max would only cost 0.21 yuan (less than 3 U.S. cents) for every 10,000 tokens, which are the units of data the LLM processes. When compared to Baidu's Ernie 4.0 and Alibaba's Tongyi Qwen-Max, which charge 1.2 yuan for the same amount, iFlytek's price is startlingly lower.

With Spark's system, one token equates to 1.5 Chinese characters. According to details from iFlytek's official WeChat account, for the low price of 2.1 yuan ($0.29), Spark Max can generate text equivalent to the entire content of Yu Hua's renowned novel 'To Live'.

Notably, China Mobile, a state-owned enterprise, is the largest shareholder in iFlytek with a 10% stake in the company.

The aggressive pricing by iFlytek is a clear indication of the increasingly competitive nature of the AI industry in China, with significant implications for both domestic and potentially global AI markets.

AI, price, China