Chinese AI Labs Face More Pressure from Intensified Price War
Dow Jones
Oct 01
0839 GMT - Chinese artificial-intelligence labs are facing more pressure from an intensified price war, Jefferies analysts say in a research note. The average application programming interface price gap between U.S. and Chinese frontier models widened to 70% in September from 60% in August, the analysts say. API pricing is a usage-based billing system where AI providers charge users for the services provided. "Sustained high capital expenditure, falling API prices, and more competitors are negative for AI-lab economics, particularly in China," they say. Jefferies continues to prefer platform players, given their "multiple monetization channels and ability to cross-sell AI services into sticky enterprise and consumer user bases," the analysts say.
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