(Yicai) March 18 -- Alibaba Cloud will raise prices for its artificial intelligence computing and storage products by as much as 34 percent starting next month, the cloud computing arm of Chinese e-commerce giant Alibaba Group Holding said today, citing booming global demand and higher supply chain costs.

The price hikes will take effect from April 18, the Hangzhou-based firm said. However, existing customers will see the new prices take effect at their next renewal cycle.

Another key factor behind the price increases is the explosive demand in token usage, The Paper reported today, citing informed sources. During the nine-day Lunar New Year holiday last month, AI agent applications took off, and Alibaba Cloud's Model-as-a-Service business, Bailian, recorded its fastest growth ever from January to March.

Alibaba Cloud is now reallocating its limited AI computing resources to focus more on token-related services, the report said. This shows that the company is adjusting its strategy and is shifting from selling computing power to selling intelligent services, powered by its self-developed Qwen large language model.

"We are on the eve of an explosion in artificial general intelligence,” Alibaba Chief Executive Officer Eddie Wu said in an internal letter. “Massive amounts of digital work will soon be supported by tens of billions of AI agents, which will run on tokens generated by models. These AI agents will become the main way humans interact with the digital world."

Yesterday, Alibaba also unveiled the world's first enterprise-grade AI-native work platform called "Wukong." Alibaba's business-to-business AI capabilities will gradually be integrated into this platform in the form of skills, serving as a single entry point for the firm's enterprise AI applications.

And the day before that, Alibaba said that it is setting up a new business group, the Alibaba Token Hub, which comprises the Tongyi Lab, the MaaS business line, the Qwen division, the Wukong division and the AI innovation division. Together, they cover everything from foundational model development to business and consumer AI applications.

This year, a number of major overseas cloud service providers have raised the price of their core cloud products. For example, on Jan. 27, Google Cloud announced price increases on data transfer, AI and computing infrastructure services, with hikes of up to 100 percent.

Editor: Kim Taylor