New York, Feb 2, 2026, 05:17 ET — Premarket
- Alibaba is set to invest 3 billion yuan ($431 million) to boost its Qwen AI app ahead of the Lunar New Year
- BABA slipped 0.8% in premarket trading to $168.17, following a close of $169.56 earlier.
- Investors eye the Feb. 6 campaign launch and an AI model update from rival DeepSeek expected mid-month
Alibaba Group Holding’s U.S.-listed shares slipped 0.8% to $168.17 in early trading Monday, after the company announced plans to invest 3 billion yuan ($431 million) to boost users of its Qwen AI app. The stock had closed at $169.56 previously.
Spending reveals the story. China’s top tech giants are racing to dominate consumer AI apps, treating it like a land grab. Downloads tend to surge sharply during the Lunar New Year break.
Alibaba now faces a choice: prioritize costs or ramp up traction. Driving user acquisition could boost engagement on its shopping and services apps, but if competitors respond in kind, it risks turning into a costly subsidy battle.
Alibaba announced the incentives start Feb. 6, focusing on dining, drinks, entertainment, and leisure. These will be distributed via “red envelopes.” In China, digital red envelopes—cash or voucher gifts sent through apps—are a popular way to engage users fast.
Tencent and Baidu have announced Lunar New Year promotions for their AI chatbots, allocating 1 billion yuan and 500 million yuan, respectively, Alibaba’s statement revealed. Alibaba hasn’t clarified if its rewards will come as cash red envelopes or discount coupons usable on platforms like Taobao.
This year’s calendar plays a key role. The public holiday kicks off on Feb. 15 and lasts nine days—longer than usual—which typically boosts online shopping and app activity.
But this strategy carries risks. If discounts spiral into a price war for eyeballs, marketing costs surge with little guarantee of returns — particularly when customers come just for the deals and vanish once the coupons dry up.
Rivals’ next moves remain unclear. According to The Information, DeepSeek plans to roll out its next-gen AI model, V4, by mid-February. That ramps up the pressure for new features and launches ahead of and throughout the holiday season.
With the holiday behind them, investors will watch for clearer signs of demand for Alibaba’s AI products and if Qwen can turn interest into steady usage. The initial test arrives on Feb. 6, when the campaign kicks off and the company details how its rewards program will function.
Alibaba’s next major event is earnings, slated for Feb. 19 per Zacks. Investors will be zeroing in on cloud growth and any updates about the costs tied to the company’s AI investments—and what those outlays are delivering.
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