TL;DR: While the West focuses on model capability (IQ), Xiaomi just changed the conversation to Unit Economics. By pricing their new model at $0.10 per million tokens—a staggering 20x to 100x cheaper than the market standard—they aren't just competing; they are trying to commoditize intelligence entirely. This brings back memories of their smartphone strategy 14 years ago. The question isn't "Is the model good?" The question is: "Who can afford to stay alive at these prices?"
James here, CEO of Mercury Technology Solutions.
In the martial arts world, there is a phrase: "No Martial Virtue" (不講武德). It means fighting without honor—kicking the opponent when they are down, or using overwhelming force to end the fight instantly.
Xiaomi just entered the AI chat with absolutely zero martial virtue.
The Impossible Math
Let's look at the numbers Xiaomi just put on the board:
- Price: $0.10 USD / 1 Million Tokens
- Speed: 150 tokens/second
For context, top-tier closed-source models in the current market usually start at $2.00 to $10.00 per million tokens. Xiaomi isn't offering a 20% discount. They are offering a 95% to 99% discount.
"Cheap" Does Not Mean "Bad"
Usually, when something is 100x cheaper, it's garbage. But the MiMo-V2-Flash isn't a toy. It scores 73.4% on SWE-bench (Software Engineering Benchmark).
This places it within striking distance of the top-tier closed models from OpenAI and Anthropic. It’s not the absolute smartest in the room, but it is "smart enough" for 90% of commercial use cases—and it costs effectively nothing to run.
The Xiaomi Playbook: 2011 Redux
If you have been in tech long enough, this feels like déjà vu.
14 years ago, Xiaomi launched their first smartphone at 1,999 RMB. At the time, comparable flagships were double or triple that price. They commoditized the hardware, destroyed the margins of their competitors, and built an empire on the ecosystem.
Now, they are doing exactly the same thing to Token Economics. They are betting that if they drive the cost of intelligence to zero, they will own the infrastructure of the next decade.
As Xiaomi’s Luo Fuli stated: “This is just Step 2 of the AGI roadmap.”
Who Survives the Price War?
This is a terrifying signal for the AI industry.
- The Middle-Layer Wrappers: If your business model is reselling GPT-4 access with a slight markup, you are dead. You cannot compete with $0.10.
- The Proprietary Model Builders: Unless you have the scale of Google or Meta, how do you justify burning cash to train a model when your competitor is selling inference at a loss?
Xiaomi has signaled the end of the "High Margin AI" era. We are entering the Utility Era. Intelligence is becoming as cheap as electricity.
The winners will not be the ones selling the electricity. The winners will be the ones building the factories that run on it.
Mercury Technology Solutions: Accelerate Digitality.
