The competitive landscape in the AI sector has significantly impacted the pricing and development strategies of major tech companies in China. With the increasing investment in AI from both startups and tech giants, the market has seen the development of numerous AI models and a wide array of consumer and enterprise products. This has led to a highly competitive environment, with companies like Alibaba, Baidu, and ByteDance battling for market share.

One significant effect on pricing strategies is the recent price war among these companies. Alibaba slashed prices for several AI services by up to 97%, followed by Baidu Cloud offering free services utilizing its Ernie AI models, and ByteDance pricing its AI services 99% lower than typical Chinese industry rates. This price-driven battle has intensified the competition within the AI sector, as companies aim to attract a large user base to accelerate AI advancements.

In terms of development strategies, companies are focusing on expanding the applications of large models from simple AI-generated content to long-text output and code assistants. For instance, Baidu's code assistant has written a quarter of its internal code, and Alibaba Cloud is fully implementing AI code writing, aiming for 20% of code to be generated by intelligent assistants in the future.

Furthermore, companies are investing in internal AI labs and projects to enhance their offerings and maintain a competitive edge. For example, Yeahka, a Chinese leading payment-based technology platform, formed a 10-person AI Lab team to develop internal generative AI projects after the emergence of ChatGPT. The team has focused on applications like intelligent customer service, code assistants, and AI content creation tools, which have been progressively implemented since 2023.

In summary, the competitive landscape in the AI sector has led to aggressive pricing strategies, a focus on expanding AI applications, and increased investment in internal AI development projects among major tech companies in China.