Baidu joins Alibaba in raising its prices for its AI computing power-related services by ~5% to 30% and its parallel file storage system by 30% from April 18
The Chinese firms' price increases are ‘a reasonable response to evolving market conditions’, says IDC China analyst Cui Tingting
Context & Ripple Effects
This marks a reversal from the earlier cloud and AI-service price competition: Alibaba’s 2024 reductions helped prompt Baidu to make Ernie-based services free, while Alibaba was still cutting Qwen3-Max API pricing late in 2025.
The move follows Alibaba’s own latest increases for AI compute and parallel file storage a day earlier. Two major providers moving in step makes the change more consequential for customers than an isolated tariff revision.
First-order effects
- Baidu and Alibaba customers using the affected AI-computing services and parallel file storage will face higher bills from April 18, with the stated increases ranging from roughly 5% to 30% for compute-related services and 30% for the storage product.
- Baidu and Alibaba immediately improve the revenue per unit of the affected infrastructure services, while customers must reassess workloads whose economics relied on prior pricing.
Second-order effects
- Enterprise users and AI developers have greater incentive to control compute and storage consumption, shift workload placement, or seek competing cloud offers before committing new capacity.
- Rivals retain an opening to compete on price: ByteDance had been expanding cloud through sales hiring and lower prices, so its positioning could become more relevant if the new tariffs persist.
Third-order effects
- If coordinated-looking increases spread beyond these two providers, China’s AI cloud market may move from broad price-led customer acquisition toward more explicit capacity and infrastructure-cost discipline.
- The episode reinforces that AI-service pricing can diverge by layer: model APIs may remain aggressively priced while compute and storage become less subsidized, changing how customers evaluate total AI deployment cost.
The trend: China’s AI cloud market is testing whether providers can shift from price-war customer acquisition toward pricing that more closely reflects infrastructure demand and operating economics.