Large model price war: Xiaomi follows DeepSeek and lowers prices, Luo Fuli advises peers not to blindly follow suit

In just a few weeks, the large model industry has turned 180 degrees from a "price increase" to a "price reduction war". Previously, Alibaba, Byte and other manufacturers have successively adjusted model service prices. The price of some APIs of Zhipu has soared by 83%. The industry once released a signal that "high-quality models return to value pricing." Just when most people thought that the era of low prices was over, DeepSeek suddenly announced that the previous 75% discounted price of the flagship model V4-Pro would be permanently retained - which is equivalent to the official price being directly reduced to a quarter of the original price.

Just a few days later, Xiaomi followed up with a high profile. On May 27, Xiaomi officially announced a permanent price reduction for the MiMo-V2.5 series API, with a maximum reduction of 99%. At the same time, it canceled the complex context length tiered billing rules and upgraded the Token package system. Developers can obtain 5 to 8 times the call quota under the same budget.

Luo Fuli, the person in charge of Xiaomi's large models, spoke out and reminded peers not to blindly follow the trend: "Reducing prices is not the purpose, allowing developers to use good models is. Blindly following the trend and reducing prices will only damage the long-term healthy development of the entire industry." Luo Fuli was previously the core developer of DeepSeek V3 and switched to Xiaomi at the end of 2025. The warning she issued as a person who has experienced it is self-evident.

The essence of the large-model API price war is the dual drive of "declining computing power costs + intensified competition." DeepSeek and Xiaomi's serial price cuts are pushing China's AI industry from the "high-price scarcity era" into the "low-price inclusive era", but Luo Fuli's reminder points out the key risk - if the price war turns into a simple money-burning competition, it will ultimately be the long-term health of the entire developer ecosystem and the industry that is hurt.

Worth following up on:

1. Sustainability of the price war: Is there a real decline in computing power costs behind the 99% drop?
2. Luo Fuli’s industry influence: The substantial impact on the industry structure after the former core developer of DeepSeek switched to Xiaomi
3. Response from the developer ecosystem: Can price drops really drive the large-scale explosion of AI applications in China?