Alibaba Group Holding Ltd. (BABA) is making a big bet that throwing money at users will turn its AI assistant into a household name. The company rolled out a $420 million Lunar New Year promotion to boost adoption of its Qwen app, and it worked a little too well. The platform buckled under the traffic surge as cash-hungry users flooded in.
At the same time, Alibaba is taking Qwen global, partnering with Olympic organizers to embed its AI technology into the 2026 Winter Games in Milan and Cortina. It's an ambitious two-pronged strategy: dominate at home with cash incentives, gain prestige abroad with Olympic branding.
AI Meets the Olympic Rings
Alibaba Cloud announced its Olympic partnership on Wednesday with Olympic Broadcasting Services and the International Olympic Committee. This marks the first time a large language model will be woven into the Olympics' digital infrastructure.
The Qwen model will power "Olympic AI Assistants" designed for both fans and IOC operations, according to reports. Alibaba Cloud also plans to enhance real-time replay capabilities and upgrade cloud-based broadcasting systems for the games.
It's a high-profile showcase for technology that Alibaba is simultaneously trying to push into everyday Chinese life.
Jack Ma Makes an Appearance
Back home, competition for consumer AI dominance is heating up. Jack Ma, Alibaba's founder, visited the Qwen project office ahead of the Lunar New Year cash blitz, signaling how seriously the company takes this push.
Alibaba created the Qwen C-end Business Group last December by merging its intelligent information and intelligent interconnection divisions. Led by Vice President Wu Jia, the unit oversees Qwen and Quark, an AI-driven consumer "super-workbench."
The strategy centers on integration. Alibaba has embedded Qwen across its entire ecosystem so users can order food, book flights, shop, stream content, and get travel guidance with a single command. The company revamped its AI chatbot in November, relaunching it as Qwen with upgraded large language models. Within just two months, the app reportedly hit 100 million monthly active users.
On February 3, Alibaba announced $420 million in cash incentives to drive downloads and usage of Qwen's AI shopping features over the holiday period. The goal was clear: get users hooked by literally paying them to try it.
When Success Becomes a Problem
The campaign delivered demand, all right. Maybe too much of it.
Many users reported they couldn't access the campaign entry page after the cash incentives launched. The system simply crashed under the weight of traffic.
"We are urgently increasing resources to ensure the smooth operation of the system," an Alibaba official told media on Friday. That's tech company speak for "we didn't expect this many people to show up."
It's the kind of problem companies actually want to have, though dealing with it in real time during a major holiday promotion is less than ideal. The crashes highlighted the gap between Alibaba's ambitions and its current infrastructure capacity.
The Bigger AI Infrastructure Play
Alibaba isn't just pushing consumer apps. It's also racing to build the underlying infrastructure to support them, especially as U.S. export restrictions make access to cutting-edge chips more complicated.
The company is developing its own high-end chip to reduce dependence on Nvidia Corp. (NVDA). Its chip unit, T-Head, revealed details about the Zhenwu 810E parallel-processing processor, which Alibaba claims offers performance comparable to Nvidia's China-focused H20 chip.
This matters because AI models are hungry for computing power, and if you can't reliably source the best chips from abroad, you need to make your own.
Alibaba's promotional push is happening alongside similar campaigns from rivals including Baidu Inc. (BIDU), which is ramping up its own holiday AI promotions. The Lunar New Year has become a battleground for Chinese tech companies trying to capture the consumer AI market.
BABA Price Action: Alibaba shares were up 1.85% at $160.68 during premarket trading on Friday.
