May 22, tech giants$TENCENT (00700.HK)$After applying to participate in the war, Tencent Cloud announced a new large-scale model upgrade plan.

According to Tencent, one of the main models is the mixed-lite model. The total length of API input and output is planned to be upgraded from the current 4K to 256k, and the price will be adjusted from 0.008 yuan/thousand tokens to completely free. The maximum configuration is the trillion parameter model mixed element pro, and the API input price was reduced from 0.1 yuan/thousand tokens to 0.03 yuan/thousand tokens, a decrease of 70%.

The reporter noticed that since May of this year, a number of domestic manufacturers have been fighting over the price of big models, including Alibaba Cloud, Baidu Smart Cloud, and iFLYTEK, all of which have announced drastic price cuts for their big models, and even free of charge.

Industry insiders analyzed that by lowering the price threshold, large model manufacturers are expected to attract a wider group of enterprise users and help big model manufacturers balance revenue and costs.

Tencent's latest entry

On May 22, Tencent Cloud announced a new large-scale model upgrade plan. One of the main models is the mixed-lite model. The total API input and output length is planned to be upgraded from the current 4k to 256k, and the price will be adjusted from 0.008 yuan/thousand tokens to completely free.

The mixed-standard API input price dropped by 55% from 0.01 yuan/thousand tokens to 0.0045 yuan/thousand tokens, and the API output price dropped by 50% from 0.01 yuan/thousand tokens to 0.005 yuan/thousand tokens. The newly launched mixed-element standard-256k has the ability to process ultra-long text of more than 380,000 characters. The API input price was lowered to 0.015 yuan/thousand tokens, a decrease of 87.5%, and the API output price dropped to 0.06 yuan/thousand tokens, a decrease of 50%.

The maximum configuration is the trillion parameter model mixed element pro. The API input price was reduced from 0.1 yuan/thousand tokens to 0.03 yuan/thousand tokens, a decrease of 70%. The above price adjustments took effect immediately.

According to reports, Tencent's mixed-element model is a trillion-billion parameter model developed by Tencent. It was the first in China to use a hybrid expert model (MoE) structure, and the overall performance of the model is 50% higher than the previous generation. According to Sullivan's evaluation results, Tencent's mixed element is in the first tier of the domestic big model, which is higher than the moving average of the international big model. Many models of different versions and sizes, such as Mixed-Pro, Mixed-Standard, and Mixed-Lite, are open to enterprises and individual developers in the form of APIs through Tencent Cloud.

Tencent Cloud said that at present, the big model track is still in the process of climbing. It attaches great importance to technology accumulation and customer experience, and will continue to provide customers with competitive products and services in the future.

A Chinese brokerage reporter noticed that Tencent is one of the new manufacturers to join the big model price war.

On May 22, iFLYTEK also announced that iFLYTEK's API capabilities will be officially released free of charge. Among them, the IFLY Spark Lite API is permanently free, and the IFLY Starfire Pro/Max API is as low as 0.21 yuan/10,000 tokens.

On May 21, Alibaba Cloud announced that the API input price of Tongyi Qianwen GPT-4 main model Qwen-Long was reduced to 0.0005 yuan/thousand tokens, a direct drop of 97%. Subsequently, Baidu Smart Cloud announced that the two main models of Baidu Wenxin's big model, ENIRE Speed and ENIRE Lite, are completely free and effective immediately.

Hualong Securities analyzed in the research report. From an industry perspective, as domestic and foreign model manufacturers compete more intensely for technology, we believe that the big model industry is clearly showing signs of starting a price war, and more big model manufacturers are expected to join the price competition. By lowering the price threshold, big model makers are expected to attract a wider group of enterprise users and help big model makers balance revenue and costs. At the same time, more end users are expected to use basic AI applications for free, and huge traffic will help enterprises further improve model service capabilities and complete a virtuous cycle.

Tencent continues to buy back

Since this year, Tencent's first-quarter results have greatly exceeded expectations. Coupled with continued repurchases, Tencent's stock price has performed brilliantly.

In terms of repurchases, Tencent continued to step up its efforts this year. Tencent previously announced its 2024 share repurchase plan. The planned repurchase scale will increase from HK$49 billion in 2023 to over HK$100 billion in 2024.

The first quarterly report shows that in the first quarter of this year, Tencent repurchased 51.04 million shares, with a total repurchase price of HK$14.8 billion.

Following the release of its quarterly report on May 14 this year, Tencent continued its repurchase operation on May 17, May 20, May 21, and May 22, spending HK$415 million, HK$1 billion, and HK$1 billion respectively to repurchase shares.

In terms of stock price performance, since this year, Tencent's stock price has risen sharply. Since this year, Tencent's stock price has risen 32.06%. On May 16, Tencent's stock price rose to HK$400.2 per share, the highest in a year. On May 22, Tencent closed at HK$384.4 per share, with a total market capitalization of HK$3621 billion.

According to data, in the first quarter of this year, Tencent's revenue was 159.5 billion yuan, up 6.3% year on year, in line with market expectations. Gross margin increased 7.1 percentage points to 52.6% year on year, and adjusted net profit was 50.3 billion yuan, a sharp increase of 54.5% year on year to 50.3 billion yuan, exceeding market expectations.

According to reports, in the first quarter of this year, Tencent achieved growth in total local and international game sales through team adjustments. High-quality revenue such as video accounts, search ads, mini game platform service fees, and video account merchant technical service fees drove gross profit and operating profit growth exceeding expectations.

The first quarterly report also showed that Tencent Fintech's business services grew steadily. Among them, revenue from fintech and corporate services increased 7% year-on-year to 52.3 billion yuan. This was partly offset by a slowdown in offline consumer spending growth and a decrease in withdrawal revenue. At the same time, the increase in cloud service revenue and technical service fees for video merchants drove a ten-point year-on-year increase in enterprise services.

Editor/Jeffrey