Alibaba to spend $431M as China AI chatbot race heats up
Alibaba has announced plans to invest 3 billion yuan (about $431 million) to promote its Qwen artificial intelligence app during the Lunar New Year holiday, intensifying competition among China’s leading tech companies in the fast-growing AI chatbot market.
The spending campaign, set to begin on February 6, is significantly larger than similar promotions recently announced by domestic rivals. Tencent previously pledged 1 billion yuan, while Baidu announced a 500 million yuan push to promote their own AI chatbot platforms, News.Az reports, citing Reuters.
Alibaba said the campaign will focus on attracting and retaining users through incentives linked to dining, beverages, entertainment and leisure activities. The company also plans to distribute digital “red envelopes,” a traditional Lunar New Year gift that has increasingly been adapted into digital marketing campaigns.
However, the company has not yet clarified whether these red envelopes will be distributed as direct cash rewards or as discount vouchers usable across its platforms, including its major e-commerce marketplace Taobao.
Chinese technology companies have long used the Lunar New Year period as a major opportunity to attract new users. The holiday typically sees hundreds of millions of people traveling, spending time with family and increasing their use of digital services, making it one of the most important marketing windows of the year.
One of the most notable examples came in 2015, when Tencent used its WeChat platform to distribute digital red envelopes. The campaign helped boost adoption of WeChat Pay and intensified competition with Alipay, which had previously dominated China’s mobile payment sector.
This year’s Lunar New Year public holiday begins on February 15 and will last nine days, slightly longer than in many previous years, potentially increasing user engagement across digital platforms.
Competition in China’s artificial intelligence sector has intensified sharply over the past year. The launch of DeepSeek’s R1 AI model in January last year accelerated adoption across industries and triggered stronger rivalry among domestic technology companies.
Tencent’s current campaign focuses on promoting its Yuanbao chatbot application. The promotion requires users to update the app to its latest version to receive digital red envelopes, which can then be transferred to their WeChat wallets. Users are also able to share promotional links with others, offering additional reward opportunities.
Meanwhile, other Chinese AI companies are preparing new product launches ahead of the holiday period. DeepSeek is reportedly planning to release its next-generation V4 AI model in mid-February, with improved coding and technical capabilities expected to be among its key features.
The latest spending wave highlights how user acquisition has become a central battleground in China’s AI industry. Companies are increasingly combining traditional consumer marketing strategies with advanced AI product promotion to build long-term user ecosystems.
For Alibaba, the campaign reflects a broader strategy to strengthen its position in the AI space while integrating artificial intelligence more deeply across its digital services, including e-commerce, cloud computing and consumer applications.
As major technology companies race to expand their AI user bases, the Lunar New Year period is once again emerging as a key testing ground for digital innovation, marketing strategy and long-term platform growth in China’s competitive technology landscape.
By Aysel Mammadzada
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