“We diligently iterated the core technology of our models and improved its efficiency,” Zhipu AI chief executive Zhang Peng said at the event. “This is not just a simple price war. Through technological innovation, we lowered the cost and improved customer value.”
This development reflects Zhipu AI’s confidence to go head-to-head against the major LLM service providers in the market, just days after it reportedly raised a US$400-million financing round that valued the start-up at US$3 billion.
Zhipu AI chief executive Zhang Peng speaks at a corporate event in Beijing on June 5, 2024. Photo: Handout
Saudi Arabia’s Prosperity7 Ventures joined the latest financing round for Zhipu AI, becoming the first known foreign firm to back a Chinese generative AI player, according to a Bloomberg report last week, citing people familiar with the matter. That venture capital fund is an arm of energy giant Saudi Aramco.
Zhipu AI declined to comment on its latest financing round, while Prosperity7 Ventures did not immediately respond to a request for comment.
Tech unicorn Zhipu AI on Wednesday unveiled three new iterations of its LLM: the GLM-4-Flash version, which costs 0.1 yuan per 1 million-token prompt; GLM-4-Air at 1 yuan per 1 million tokens; and the more powerful GLM-4-Air Extreme, priced at 10 yuan per 1 million tokens.
Meanwhile, the cost of Zhipu AI’s high-end GLM-4 LLM remains unchanged at 100 yuan per million tokens.
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How does China’s AI stack up against ChatGPT?
How does China’s AI stack up against ChatGPT?
The lower-cost LLM campaign of Zhipu AI comes less than a month after several Chinese Big Tech firms slashed prices on their AI models amid the increased opportunity in the country’s AI market, where a growing number of companies – including start-ups, Big Tech firms and state-owned enterprises – are scrambling to adopt GenAI tools to help boost their productivity and efficiency.
Tencent Holdings and iFlytek launched their LLM discounts in the same week last month when Alibaba Group Holding, owner of the South China Morning Post, and Baidu introduced price cuts on their respective AI models. Alibaba and Tencent are also among the early investors in Zhipu AI.
China’s LLM price war started earlier last month when TikTok owner ByteDance introduced its Doubao LLM family, with a Pro version that costs as low as 0.0008 yuan per 1,000-token prompt. ByteDance touted that its prices were 99.8 per cent lower than OpenAI’s GPT-4 model.
Another AI unicorn, Baichuan, recently cautioned against a deepening LLM price war in the world’s second-largest economy. Zhipu AI, Baichuan, Moonshot AI and MiniMax comprise the country’s four AI tigers.
