joustarcade| Morgan Stanley: Price reductions on large models increase AI applications, which will benefit from revenue from Baidu, Alibaba and Tencent Cloud businesses

Gelonghui May 23| Morgan Stanley issued a report stating that the price reduction of large-scale language models in the mainland has increased AI applications and provided more AI use cases. It is expected that the revenue from Baidu, Alibaba and Tencent Cloud businesses will benefit, and the scale is smallerjoustarcadeStart-ups may be affected. According to the report, Alibaba Cloud announced on May 21 that it announced the price reduction of nine commercial and open source models of its Tongyi Qianwen, including OpenAI GPT-4.joustarcadeThe main model has been reduced by 97%. Baidu Intelligent Cloud, a subsidiary of Baidu, followed suit and announced that its two main models of Wenxin Model, ENIRE Speed and ENIRE Lite, are all free. On the next day, Tencent Cloud also announced a comprehensive reduction in the price of large models, and Mixed Origin Lite will be free from now on.

Morgan Stanley pointed out that Alibaba management said the price reduction was due to Alibaba Cloud's advantages in scale and technology. Driven by rapidly growing demand for artificial intelligence, cloud revenue related to artificial intelligence achieved triple-digit growth in the recent quarter. The bank currently expects that cloud revenue growth will accelerate back to double digits in the second half of fiscal year 2025, driven by the recovery of public clouds and increased contributions from artificial intelligence. In terms of profitability, the bank expects EBITA profit margin to remain high in single digits in fiscal 2025, compared with 5.5 percent in the fourth quarter of fiscal 2024.joustarcade.6%。