Chinese artificial intelligence company Zhipu AI on Wednesday announced its second price cut in a month, slashing the price tag of its “most popular model” by more than half. The company said it would now offer its GLM-4 model at a charge of RMB 0.10 ($0.014) per 1,000 tokens, but CEO Zhang Peng insisted the move was not part of “a simple price war.”
Why it matters: Offering ever lower prices to capture market share characterizes China’s AI sector at the moment, where over 200 large language models have been released since October 2023.
Details: Tokens are sequences of data that large language models use to process text. GLM-4-0520, the most advanced model built by Zhipu AI, has a context window of 128,000 tokens with RMB 1 for every 10,000 input tokens. The price of this advanced model was cut in May.
Generally, 1,000 tokens are equivalent to around 750 English words or 500 Chinese characters.
- The deep discounts are a result of “iterations of the models’ core technologies,” Zhang said at a Zhipu AI open day on Wednesday. In an interview on the same day, Zhang was quoted by local media outlet TMTPost as saying, “not only can we join [the price war], but we can do it without losing money.”
- The company, which is backed by leading Chinese academy Tsinghua University, has disclosed that it currently serves 300,000 enterprise-level customers, and on average its model family processing exceeds 40 billion tokens daily.
- On the consumer side, the firm has a GenAI app called Zhipu Qingyan that is powered by the company’s foundation model ChatGLM, with the app already having amassed 300,000 AI agents that can perform tasks such as creating mind maps and making schedules since its launch last August, the company said.
Context: Zhipu AI has received at least nine rounds of financial injections from Chinese state-backed funds, major tech companies, and well-known venture capital firms since it was founded in 2019. Those supporters include Alibaba, Tencent, Sequoia, and Hillhouse.
- The Beijing-based company also acts as an investor and has invested in seed and angel rounds in rival ModelBest, a firm similar to Zhipu AI that was founded by Tsinghua University graduates.
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