Alibaba Intensifies China’s AI Competition With 3bn Yuan Lunar New Year Investment in Qwen App
Alibaba is set to introduce 3 billion yuan in incentives for Qwen AI during the Lunar New Year, ramping up the competition with Tencent and Baidu.
Alibaba Group has revealed intentions to invest 3 billion yuan ($431 million) to draw users to its Qwen artificial intelligence app during the Lunar New Year holiday, intensifying the rivalry among China’s leading technology companies for supremacy in the rapidly expanding AI sector.
The initiative is scheduled to commence on 6 February and will concentrate on user incentives in the areas of dining, drinks, entertainment, and leisure. On Monday, Alibaba announced that the campaign would include “large red envelopes distributed continuously” during the festive season.
Alibaba’s commitment far exceeds that of its primary competitors. At the end of last month, Tencent and Baidu revealed plans to invest 1 billion yuan and 500 million yuan, respectively, in comparable promotional campaigns aimed at boosting the adoption of their AI chatbot products.
Chinese technology companies have historically viewed the Lunar New Year period as an essential marketing opportunity, leveraging the festive season when hundreds of millions of individuals journey home and spend quality time with their families. Promotions linked to digital “red envelopes,” a customary method of gift-giving during the holiday, have demonstrated notable success in attracting new users.
A prominent example can be traced to 2015, when Tencent utilized its WeChat messaging app to distribute digital red envelopes. The decision significantly contributed to WeChat Pay’s ability to compete with Alipay, which was the leading force in China’s mobile payments sector at that time.
The public holiday period this year starts on 15 February and extends for nine days, offering a longer duration than in many previous years and giving companies an ample opportunity to launch promotions.
The AI industry in China has experienced a significant increase in competition since the introduction of DeepSeek’s R1 model in January of the previous year, which disrupted global AI markets and hastened both adoption and competition among local companies.
Tencent’s campaign will focus on its Yuanbao chatbot app and is set to launch on Sunday. To claim digital red envelopes, users must upgrade to the latest version of the app as part of the promotion, allowing them to withdraw the envelopes to their WeChat wallets. Tencent announced that users will have the ability to share links that provide cash rewards for others to claim.
Alibaba, however, did not clarify whether the rewards from its Qwen AI campaign would be given as cash red envelopes or as discount coupons that can be used across its platforms, including its main e-commerce site, Taobao.
In addition to the leading companies, numerous other Chinese AI firms have been implementing enhancements in anticipation of the holiday. DeepSeek plans to unveil its next-generation AI model, V4, in mid-February. A report by The Information indicates that the new model is anticipated to showcase robust coding capabilities.
