Alibaba’s Aggressive AI Push: Billions in Investment and Strategic Advances

Chinese e-commerce leader Alibaba is making a substantial financial commitment to secure dominance in the nation's competitive artificial intelligence sector. The company is directing a significant $431 million investment into its Qwen AI assistant, a move that substantially outpaces rival initiatives. Concurrently, its semiconductor division is reporting major progress, securing its first wave of prominent clients for its proprietary chip.

Alibaba's internally developed AI chip, the Zhenwu 810E, is gaining market acceptance. Designed for both training AI models and running inference tasks, the chip is now being utilized by more than 400 customers. This client roster includes several high-profile organizations:
* State Grid Corp. of China, the state-owned utility giant.
* XPeng, the electric vehicle manufacturer.
* The Chinese Academy of Sciences.

Internally, Alibaba is already using the Zhenwu 810E to train its Qwen models. The advancement of domestic semiconductor technology is becoming increasingly critical for Chinese tech firms amid ongoing geopolitical tensions.

A Major Bet on Autonomous Logistics

In a separate but related strategic investment, Alibaba's logistics arm, Cainiao, is taking a stake in Zelos Technology. Zelos specializes in Level-4 autonomous driving systems for logistics applications. The total value of the investment deal is reported to be $2 billion. The partnership aims to co-develop an unmanned cargo transporter. Cainiao has clarified that it will not acquire a controlling majority stake in Zelos as part of this agreement.

Should investors sell immediately? Or is it worth buying Alibaba?

Holiday Campaign to Drive AI Adoption

Aligning with a key shopping period, Alibaba has announced a 3 billion yuan promotional campaign for its Qwen app during the Chinese New Year holiday. This investment dwarfs the planned outlays of its main competitors; Tencent has allocated 1 billion yuan for its chatbot, while Baidu has set aside 500 million yuan.

The promotional drive is scheduled to commence on February 6. It intends to attract users by offering discounts and promotions for dining, entertainment, and leisure activities. The company did not specify whether the incentives, referred to as "big red envelopes," would consist of direct cash or vouchers for use on platforms like Taobao.

The timing is strategically selected, as the nine-day holiday period begins on February 15—longer than in most previous years. Competition in China's AI landscape intensified notably following the January 2025 launch of DeepSeek's R1 model.

Upcoming Financial Results

Market watchers will be looking for further context when Alibaba releases its quarterly earnings on February 19. In its previous report for Q2 of fiscal year 2026 (published November 25, 2025), the company delivered a strong outperformance. Earnings per share came in at $0.61, surpassing analyst estimates of $0.49 by a notable 24.5 percent.