Alibaba to invest $431m for Qwen AI promotion

Alibaba plans to invest 3 billion yuan (US$431 million) during the Lunar New Year holiday to promote its Qwen AI app, intensifying competition among China’s leading tech firms.

The campaign, starting February 6, will offer incentives for dining, entertainment, and leisure, including the distribution of digital red envelopes.

Tencent and Baidu have announced similar promotions, with respective budgets of 1 billion and 500 million yuan (US$140 million and US$70 million).

Alibaba has not specified whether rewards will be cash or platform discounts.

Chinese tech companies often use the Lunar New Year period, which begins on February 15 and lasts nine days this year, to attract new users through marketing campaigns.

Competition in China’s AI sector has increased since the launch of DeepSeek’s R1 model in January last year, prompting faster adoption and rivalry among domestic players.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

A holiday promotion that raises the stakes in China’s AI fight

The red envelope giveaways mirror Tencent’s 2015 Lunar New Year push, which used the same playbook to turn WeChat into a leading mobile payments app 1.
Alibaba’s spending did not start this week. In late 2025, the Qwen AI app spent up to 15 million yuan a day to bring in new users 2.
Alibaba treats this as a company-wide focus. CEO Wu Yongming (Eddie Wu) has called it one of three “tough battles” tied to Alibaba’s future, along with cloud infrastructure and e-commerce 3.
The urgency rose after the “DeepSeek shock.” DeepSeek’s R1 model tightened competition in China’s AI market, pushing rivals such as Alibaba to speed up work, including development during the Chinese New Year holiday 4.

China’s user race is pushing cheaper AI into global products

The contest goes beyond chatbots. Companies want a single “super entrance” that links AI to daily services like Taobao shopping or WeChat payments 1.
To win at home, groups including Alibaba and DeepSeek released open-source models. The ripple reached the West quickly as companies started using them in products 5.
Pinterest runs parts of its recommendation engine on DeepSeek models. Airbnb uses Alibaba’s Qwen models due to speed and low cost 5.
This momentum shifts the global contest toward shared plumbing that others build on, where Chinese firms now reach far beyond China 5.