BEIJING, Feb 2 — Alibaba said on Monday it will spend 3 billion yuan ($431 million) during the Lunar New Year holiday to attract users to its Qwen artificial intelligence app, escalating competition among China’s biggest technology companies.
The spending commitment, which will begin on February 6, significantly exceeds the promotional budgets announced earlier by rivals Tencent and Baidu. Alibaba said the campaign will include incentives for dining, beverages, entertainment and leisure, with “large red envelopes distributed continuously.”
Late last month, Tencent said it would spend 1 billion yuan to promote its Yuanbao chatbot app, while Baidu announced a 500 million yuan campaign for its own AI chatbot products.
Chinese technology companies have traditionally used the Lunar New Year — when hundreds of millions of people travel and spend extended time with family — as a key period for user acquisition.
A landmark example was in 2015, when Tencent distributed digital red envelopes through its WeChat messaging platform, helping WeChat Pay gain momentum against then-dominant rival Alipay in China’s mobile payments market.
This year’s public holiday begins on February 15 and will last nine days, longer than in most previous years, offering an extended window for promotional campaigns.
Competition in China’s AI sector has intensified since the launch of DeepSeek’s R1 model in January last year, which unsettled global AI markets and accelerated both adoption and rivalry among domestic firms.
Tencent’s campaign, which starts on Sunday, will require users to upgrade to the latest version of the Yuanbao app to claim digital red envelopes that can be withdrawn to their WeChat wallets. Users can also earn cash rewards by sharing invitation links.
Alibaba did not specify whether its incentives would be distributed as cash red envelopes or as discount coupons redeemable across its platforms, including e-commerce marketplace Taobao.
Several other Chinese AI companies have also rolled out product upgrades ahead of the holiday. DeepSeek is expected to release its next-generation AI model, V4, in mid-February, featuring enhanced coding capabilities, according to a report by The Information.