Alibaba launches 3D AI model to challenge Tencent

Alibaba Group Holding Ltd has unveiled a new artificial intelligence model capable of generating 3D environments and interactive video, marking a direct push into Tencent Holdings Ltd’s core gaming and content territory as China’s tech giants race to monetise AI.

The company on Thursday introduced “Happy Oyster,” a so-called world model designed to simulate real-world physics and spatial environments. The system can be used to create 3D video content, films and game-like interactive experiences, News.Az reports, citing Alibaba.

The launch signals a deeper strategic shift for Alibaba as it expands beyond e-commerce into high-growth AI and cloud services. The company has set an ambitious target to increase annual cloud and AI revenue fivefold to around US$100 billion within five years.

In recent weeks, Alibaba has accelerated the release of new AI products and reorganised parts of its business to focus more heavily on monetisation. The latest model was developed by a newly formed internal unit, Alibaba Token Hub, and is currently available only to select early-access users.

The company has not yet disclosed a full commercial rollout timeline.

Earlier this month, Alibaba also introduced another video-generation model, “Happy Horse,” which quickly drew attention in China’s AI sector after topping performance benchmarks at launch.

The new “world model” places Alibaba in closer competition with Tencent, which has been investing heavily in AI tools for gaming and virtual environments. Tencent’s Hunyuan3D series of open-source models is also focused on building realistic 3D content and simulations for entertainment and robotics applications.

Other global players are moving in the same direction. Alphabet Inc’s Google has developed its own “Genie” model, designed to generate interactive virtual worlds for training and simulation.

World models are a new class of AI systems designed to replicate aspects of real-world physics, space and movement. They are increasingly seen as foundational technology for next-generation gaming, film production, robotics training and autonomous driving systems.

By investing in this technology, Alibaba is positioning itself to compete not only in cloud computing and AI infrastructure, but also in the future of digital entertainment and virtual world creation.

As competition intensifies, China’s biggest tech firms are rapidly expanding their AI portfolios in a bid to secure leadership in what many see as the next major computing platform shift.

News.Az 

By Aysel Mammadzada