China's AI price war is entering a new phase as companies compete on the cost of completing AI tasks. Long Wei/VCG/Getty Images China's AI price war is moving beyond blanket token price cuts, BofA says. Companies are increasingly competing on the cost of completing AI tasks, not processing tokens. US export controls accelerated China's AI push, fueling fiercer domestic competition. China's AI price war is moving beyond blanket token price cuts as companies increasingly compete on the cost of getting artificial intelligence systems to finish tasks, according to a Bank of America report published Thursday. The shift follows aggressive price cuts after low-cost Chinese AI models such as DeepSeek intensified competition across the industry. The economics are now changing, BofA said. "China's LLM price war is evolving from blanket cuts to tiered pricing," wrote BofA analysts led by Winnie Wu, the bank's head of Asia equity strategy and co-head of China equity research. Instead, companies are increasingly competing on how efficiently their AI systems complete tasks rather than simply how cheaply they process tokens. Models with stronger reasoning, longer context windows, multimodal capab
