Alibaba Chairman Joe Tsai emphasized the potential of open-sourcing large language models (LLMs) to enhance AI applications and boost demand for cloud computing.

Tsai made these comments during the VivaTech trade show in Paris on June 11, 2025.

He explained that open-sourcing Alibaba’s Qwen models will democratize AI usage and lead to more applications, which would benefit the company’s cloud computing business.

“It will drive demand for AI, it will drive training needs, and we see in the future a lot of needs for inference,” he noted.

Alibaba, known for its e-commerce operations, has been investing in AI and cloud computing as part of a restructuring initiative launched two years ago.

Tsai also mentioned China’s competitive engineering culture as a key factor in driving AI innovation. He noted that Alibaba’s developers worked through the Lunar New Year to accelerate AI development.

🔗 Source: South China Morning Post

🧠 Food for thought

1️⃣ Open-source AI as a strategic business catalyst for cloud providers

Alibaba’s decision to open-source its Qwen models reflects a broader industry trend where open AI becomes a customer acquisition strategy for cloud services.

By democratizing AI access through open-source models, cloud providers create an ecosystem that drives increased demand for their high-margin cloud computing resources, as AI model training and inference require substantial computational power 1.

This approach follows a proven business model in tech: provide accessible tools that create dependence on your infrastructure, similar to how AWS offered developer-friendly services to build its cloud dominance.

The economics make sense. While Alibaba gives away model access, the resulting AI applications will require significant cloud resources for deployment, creating recurring revenue streams through Alibaba Cloud.

Open-source AI specifically drives cloud consumption by lowering barriers to AI adoption for businesses that lack in-house expertise to build proprietary models but still need substantial computing resources to implement solutions.

2️⃣ China’s competitive AI ecosystem accelerates innovation cycles

Tsai’s anecdote about canceling Lunar New Year holidays to catch up with DeepSeek highlights the intensely competitive dynamic driving China’s AI sector.