Alibaba Doubles Down on AI During China’s Biggest Holiday

Key Highlights:

  • Alibaba will spend 3 billion yuan ($431 million) to promote its Qwen AI app during Lunar New Year.
  • The move outpaces rivals Tencent and Baidu, intensifying China’s AI chatbot battle.
  • Lunar New Year remains China’s most powerful user-acquisition window for tech platforms.
  • The AI race has accelerated since DeepSeek’s R1 model reshaped the market.

Alibaba will spend 3 billion yuan ($431 million) to attract users to its Qwen AI app during the Lunar New Year holiday. The campaign starts February 6 and targets China’s peak online activity period.
The move matters because it signals a sharper, costlier battle for AI users among China’s tech giants.

The spending commitment is three times higher than what rivals have announced so far. It puts Alibaba firmly in the lead as competition in China’s AI sector intensifies.

Why is Alibaba spending so much on AI now?

Lunar New Year is China’s most valuable marketing window. Hundreds of millions travel, spend, and stay online.
Tech firms use this period to lock in long-term users.

Alibaba said the campaign will include incentives for dining, drinks, entertainment, and leisure. It also promised “large red envelopes distributed continuously.” However, it did not clarify whether these rewards will be direct cash payouts or discount coupons usable on platforms like Taobao.

How does this compare with Tencent and Baidu?

Alibaba’s announcement follows similar moves from rivals. Tencent said it will spend 1 billion yuan, while Baidu committed 500 million yuan to promote their AI chatbot apps.

Tencent’s campaign focuses on its Yuanbao chatbot. Users must update the app to claim digital red envelopes that can be withdrawn into WeChat wallets. Users can also share links to earn additional rewards.

Baidu has shared fewer operational details but confirmed it will also rely on Lunar New Year incentives to drive adoption.

A familiar playbook with high stakes

Chinese tech firms have used festive red-envelope campaigns before. The most famous example came in 2015, when Tencent used WeChat red envelopes to help WeChat Pay challenge Alipay’s dominance.

This year’s public holiday begins February 15 and lasts nine days, longer than usual. That gives companies more time to push their AI products into daily use.

How DeepSeek changed the AI race

Competition has intensified since DeepSeek launched its R1 model last year. The launch rattled global AI markets and forced faster adoption across China.

Several AI firms are rushing upgrades ahead of the holiday. DeepSeek is expected to unveil its V4 model in mid-February, with stronger coding capabilities.

What this means going forward

Alibaba’s Lunar New Year spending highlights how central AI apps have become to China’s consumer tech strategy. As incentives rise and models improve, user acquisition is no longer cheap. The chatbot war is moving fast—and Alibaba is betting big to stay ahead.

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