Alibaba Cuts Cloud Prices to Spur Growth Before Possible IPO

Alibaba is cutting the cost of its cloud services by as much as half, a move that could win users from rivals such as Tencent Holdings Ltd. at a time it’s considering spinning off the fast-growing Aliyun business.

Alibaba's Tongyi Qianwen AI model, which was announced earlier this month, is already popular among Chinese businesses. Over 200,000 businesses have asked to join its beta testing program in industries. Alibaba thinks that combining their AI and cloud services will be a winning strategy for attracting many more customers in China.

Alibaba Cloud is cutting prices by up to 50% for its cloud services from May 7th.

Alibaba currently holds the largest market share in China and across Asia.

Tongyi Qianwen, Alibaba's AI model, is being tested in the company's operating system for cars and has received over 200,000 requests from businesses across various industries.

The cloud division is one of Alibaba's fastest-growing businesses and is considered a prime candidate for a future initial public offering(IPO).

The surge in excitement among investors after Alibaba’s announcement of the ChatGPT-like Tongyi Qianwen did not last. The company’s shares gave up much of the initial gain in recent days, and it now has to prove that it can realize the growth spike it expects to see.