Alibaba to spend $431 million for Lunar New Year AI push as chatbot war heats up

BEIJING – Alibaba (9988.HK) said on Monday it will spend 3 billion yuan ($431 million) to attract users to its Qwen AI app during the Lunar New Year holiday, heating up a race between China’s largest tech firms.

The pledge by Alibaba, which triples the spending promised earlier by rivals Tencent and Baidu, is set to start on February 6.

It will involve incentives for dining, drinks, entertainment and leisure, with “large red envelopes distributed continuously,” Alibaba said in a statement.

Tencent (0700.HK) and Baidu (9888.HK) announced late last month they would spend 1 billion yuan and 500 million yuan respectively on similar promotions for their AI chatbots.

Chinese tech companies have long used the Lunar New Year festive period – when hundreds of millions travel home and spend time with family – as a marketing battleground to acquire new users.

The most notable case was in 2015, when Tencent leveraged its WeChat messaging app to distribute digital red envelopes, helping its WeChat Pay service gain ground against Alipay, which then dominated China’s mobile payments market.

The public holiday period this year begins on February 15 and is nine days long, longer than in most previous years.

Competition in China’s AI sector has accelerated since DeepSeek’s R1 model launch in January last year rattled global AI markets, spurring both faster adoption and fiercer rivalry among domestic players.