Alibaba Group Holding Ltd. (BABA) is turning to artificial intelligence as its latest weapon in China's fiercely competitive food delivery and local services market. The e-commerce giant is expanding AI across its ecosystem, and the newest move involves helping restaurants show off their dining rooms in ways that would make interior designers jealous.

3D Visuals Made Easy

Here's the pitch: Amap, Alibaba's mapping and local services division, is launching an AI-powered tool that lets restaurants create 3D interior showcases by simply uploading videos or photos. No fancy equipment needed, no expensive photographers required. Bloomberg reported Monday that the feature is built on Alibaba's visual Wan AI model and is designed to slash marketing and promotion costs for merchants.

It's part of CEO Eddie Wu's broader strategy that mirrors what tech heavyweights like Alphabet Inc. (GOOGL) Google and Tencent Holding Ltd. (TCEHY) are doing with visual AI. To sweeten the deal, Alibaba plans to offer the service free to select businesses for a limited time, according to sources familiar with the matter.

Taking Aim at Meituan

The real story here is competition. Alibaba is directly challenging Meituan (MPNGY), which has long dominated China's local services and food delivery landscape. By giving restaurants better digital tools to attract customers, Alibaba hopes to chip away at Meituan's stronghold and make Amap a more compelling platform for both merchants and diners.

And it seems to be working, at least from an investor perspective. Alibaba stock has climbed over 82% in the past 12 months, driven largely by the company's significant investments in AI infrastructure. That includes its cloud computing services and large language models like Qwen. In 2025 alone, the company poured tens of billions of yuan into incentives and subsidies across key platforms, and the strategy has paid off in higher usage numbers.

China's AI Momentum Builds

Alibaba isn't the only Chinese tech company making AI noise. Investor sentiment around the sector got another boost Friday when Baidu, Inc. (BIDU) announced it would spin off and list Kunlunxin, its AI chip unit, in Hong Kong. The move is designed to position Kunlunxin as a standalone company and showcase its value to investors hungry for AI exposure.

Kunlunxin will join a growing roster of domestic players including Huawei Ascend, Cambricon, and Alibaba itself, all working to strengthen China's homegrown AI computing capabilities. It's part of a broader push to reduce dependence on foreign chip technology amid ongoing geopolitical tensions.

Backing the Next Generation

Alibaba is also putting money behind Chinese AI startup MiniMax, which is preparing for a Hong Kong IPO in 2026. The startup plans to raise at least 3.83 billion Hong Kong dollars (roughly $492 million), with the potential to expand to about $712 million if demand runs hot. That would value the OpenAI competitor at around $6.5 billion.

Alibaba and the Abu Dhabi Investment Authority are serving as anchor investors, committing approximately $350 million to the offering. It's another sign that Alibaba sees AI as central to its future growth, whether through internal development or strategic investments in promising startups.

Stock Movement

Alibaba shares were up 0.31% at $156.22 during premarket trading Monday. The stock's strong performance over the past year reflects growing confidence in the company's AI strategy and its ability to compete across multiple fronts in China's rapidly evolving tech landscape.