Qwen has entered the chat

Turns out Alibaba’s latest product isn’t just Qwen-tessential—it’s starting to look like a real Qwen-tender in the AI race.

Chinese online retail giant Alibaba announced today that its revamped AI assistant Qwen notched 10 million downloads in its first week of public beta. Shares popped 5.1%.

Long compared to Amazon for its global e-commerce reach, Alibaba is now leaning harder into AI under CEO Eddie Wu. The company has prioritized AI investment since 2016 and has participated in over $3.3 billion in AI deals since late 2022, making it China’s “most aggressive AI investor,” Wei Sun, principal analyst at Counterpoint, told CNBC.

“Alibaba plans to deeply integrate core lifestyle and productivity services — including digital maps, food delivery, travel booking, office tools, e-commerce, education, and health guidance — directly into the Qwen App,” the company noted in a statement. While many US mega-caps are burning cash to scale their models, Alibaba says Qwen is already breaking even.

A changing competitive landscape

The AI race is intensifying. Qwen enters a field once dominated by OpenAI’s ChatGPT, but the top dog now seems to be Google’s Gemini 3, which launched last Tuesday.

Google’s parent Alphabet has staged a massive comeback in the AI race. The stock was trading at just 20X forward earnings last year, cheaper than the S&P 500 and making Alphabet one of the cheapest stocks in the Magnificent Seven.

But sentiment has flipped: Alphabet shares have surged nearly 90% in the past 12 months, hit a record high last week, and even drew in fresh buying from Berkshire Hathaway. Shares rose yet another 6.28% today.

That momentum is reshaping the competitive landscape. Melius analyst Ben Reitzes recently warned that, if Alphabet ultimately outpaces OpenAI, it could disrupt the ChatGPT maker’s ability to meet its industry-wide commitments—creating an opportunity for companies like Alibaba as they scale their own models.

What's next?

Alibaba plans to ramp up spending on AI model development and infrastructure, in addition to the $53 billion it’s already committed to spending over three years.

Some investors see massive upside: Matthew Peterson of Peterson Capital Management says Alibaba could crack $1 trillion in market value within five years as it becomes the go-to AI platform for Chinese users who can’t access US apps like ChatGPT or Gemini.

With Alibaba reporting earnings tomorrow, investors will finally see whether its AI push—and Qwen’s early momentum—translate into real financial muscle, or if the download frenzy was just a lot of Qwen-tity without the quality.—SY