Alibaba’s $431M AI Bet Sparks New Chatbot Battle

Alibaba to Spend $431 Million Promoting Qwen AI App During Lunar New Year

Alibaba said on Monday it will spend 3 billion yuan ($431 million) to attract users to its Qwen artificial intelligence app during the Lunar New Year holiday, escalating competition among China’s largest technology firms in the fast-growing AI sector.

The spending plan, which triples the incentives pledged earlier by rivals Tencent and Baidu, will begin on February 6, the company said in a statement.

Alibaba said the campaign will offer perks across dining, drinks, entertainment and leisure, with “large red envelopes distributed continuously,” referring to digital cash-style giveaways commonly used in China to drive user engagement.

Tencent and Baidu announced late last month they would spend 1 billion yuan and 500 million yuan respectively to promote their own AI chatbot apps.

Holiday marketing battle

China’s tech giants have long treated the Lunar New Year — when hundreds of millions travel and spend time online with family — as a key battleground for acquiring new users.

One of the most notable examples came in 2015, when Tencent used digital red envelopes on its WeChat messaging app to rapidly grow WeChat Pay, challenging Alibaba’s then-dominant Alipay payments platform.

This year’s public holiday begins on February 15 and will last nine days, longer than usual, giving companies more time to roll out promotions.

AI rivalry intensifies

Competition in China’s AI market has accelerated since the launch of DeepSeek’s R1 model last year, which shook global AI markets and pushed domestic players to speed up development and user acquisition.

Tencent’s campaign, centered on its Yuanbao chatbot app, starts Sunday. Users must upgrade the app to receive digital red envelopes that can be transferred to their WeChat wallets or shared with others for rewards.

Alibaba has not specified whether its incentives will be distributed as cash or as discount coupons redeemable across its platforms, including e-commerce marketplace Taobao.

Several other Chinese AI companies are also planning upgrades ahead of the holiday. DeepSeek is expected to launch its next-generation V4 model with enhanced coding capabilities in mid-February, according to reports.

With generous giveaways and new product launches, China’s tech giants appear set to turn the country’s biggest holiday into a high-stakes race for AI users.