Name: How Alibaba Quietly Became a Leader in AI
Uploaded: 2025-11-22T18:02:02.000Z
Duration: 8 min 50 s
Description: Thousands of YouTube videos with English-Chinese subtitles! Now you can learn to understand native speakers, expand your vocabulary, and improve your pronunciation...

The global AI race is accelerating and Alibaba wants a piece of the action.

In September 2025, the Chinese tech giant announced a fresh wave of investment in AI and infrastructure.

That was on top of the $53 billion it pledged earlier in the year.

It was by far one of its boldest strategic bets to date.

There has been a huge shift in what this company is about.

it comes at a very particular moment where clearly the world is looking at AI as the next big thing.

And while the company's technology has positioned it as a serious contender in the quest for AI leadership, its rise has received less fanfare than rivals like OpenAI or Deepsea.

Deepsea changed a bit in how we see Chinese team.

We stop seeing them as in worse version of the Western mobile.

Alibaba is participating and being an important player.

This is a huge tech giant with more than 900 million users reinventing itself.

So how did Alibaba quietly become a leader in the AI race?

I'm Arjun Karpel and I've been covering tech for more than a decade.

But three of those years I've been in China, delving into the country's most fascinating giants.

And in this episode I'll unpack how it became a global AI powerhouse.

Alibaba's AI journey really started in 2016.

This is when they built their first AI lab and did some experiments and it really led them then to go more fundamental in 2017, 2018, when they also built the Damo Academy, which was an important research institute.

Acceleration happened really during the COVID years 2019, 2021, when they really started to build their own foundational models and their own chips.

But what really spurred Alibaba on was the rise of ChatGPT.

In late 2022, the app hit 1 million users in under a week, kicking off the AI race.

In response, Alibaba launched its own world class AI research lab and began backing startups, hoping to become China's answer to open AI.

Eddie wu's appointment as CEO less than a year later cemented Alibaba's commitment to its reinvention as an AI company.

In his first letter to employees, Wu called for Alibaba to return to the startup mindset and set two strategic priorities, user first and AI driven.

And in the 15 months following his appointment, Alibaba's quarterly capital expenditure surged more than doubling compared to previous years as the company ramped up investment in AI infrastructure and cloud services.

At the same time, it began selling off businesses it didn't see as critical in order to free up resources for its new initiatives.

All of these efforts have culminated into a suite of successful AI products.

First, there's Qwen, Alibaba's family of large language models that can understand text, answer questions, translate language and work with images.

It's akin to the models that OpenAI has developed that underpin ChatGPT.

Unlike most of OpenAI's models though, Alibaba's offering is open source, meaning developers can modify, redistribute and even use the models for commercial purposes.

The default way to release models in China is to open source them, so to share them freely.

And on the other hand, in the US the default way is mostly to release closed models so that you can't really download them.

And there is a big difference because if you release a closed model, you can make a specific type of business model which is selling access to the model.

But on the other hand, when you release an open source model, you get a lot more adoption.

There is a full ecosystem that grow around this type of models.

China's latest AI breakthrough has leapfrogged the world.

I think we should take the development out of China very, very seriously.

At the start of 2025, Chinese AI startup Deepseek shocked the western world with the release of its R1 model.

They strategically about seven, eight days before the Chinese New Year, which is China's largest holiday, it made big news.

Alibaba team that was in charge of Q1 canceled the holiday, stayed in the office for 8 days and by 28th of January, Alibaba came up with the Q1 2.5 which was on par with deep seq model.

And in April 2025, Alibaba followed with QN3, its most advanced model to date.

QN also powers Alibaba's AI assistant app, Quark, which has almost 150 million monthly active users.

So Quarq allows you to enter this AI toolbox for business use.

So it is an operating system for life that is run on a smart AI algorithm.

You are ultimately speaking with an intelligent genie who helps you get stuff done.

ModelScope is like Alibaba's version of an AI app store for developers and researchers.

It offers hundreds of pre trained models that users can customize and build on, making it easier to plug AI into their businesses without starting from scratch.

They have 16 million developers on that platform and they build thousands and thousands of models on there.

So they really believe in the open source approach because it allows them to expand fast throughout an ecosystem.

Behind the scenes, Alibaba has turned its cloud platform Aliyun into an AI distribution hub.

Businesses can run QN and other models on Alibaba cloud to power tools like Chatbots.

Alibaba is positioning Aliyun as a serious rival to Amazon's AWS and Microsoft's Azure.

In terms of model performance, Alibaba is a little bit closer to an Amazon than compared to an OpenAI or a Microsoft.

But we should not forget model performance is not what makes a company successful in AI.

It is about scale, it's about adoption and it's about solving real problems.

And this is where Chinese companies in general, but Alibaba in particular is really, really good at.

A Morgan Stanley report released in May 2025 projected that AI investments in China could deliver of 52% by 2030.

And Alibaba is already seeing some of that.

In August 2025, its Cloud Intelligence Group posted a 26% year on year revenue increase while AI related projects achieved triple digit growth for eight consecutive quarters.

These big investment comes at a pivotal strategic moment where Baba already has a very strong foundation, a very popular open source model, a very successful application on the ground across the country, when Baba already is building together with local governments, universities, et cetera, multiple AI labs.

The challenge for cloud outside of China is that there's a lot of competition and I think Alibaba probably has to accelerate that part of the business, which exactly is why they're investing so much money in AI Industry partnership announcements have also bolstered its credibility, including one with BMW to integrate Qwen LLMs into BMW's intelligent vehicles launching in 2026.

Another deal with Apple could bring Alibaba's AI to iPhones in China.

The partnerships are real test cases for them to build deep expertise and and models that are completely tuned to very complicated industries like automotive.

Partnerships with an Apple or a BMW help them also to make sure that this business does not go to competitors and that they have at least an arm and a leg in those global organizations.

Wherever you look, whatever you touch, where China is moving closer towards that vision of dominating AI race by 2030, Alibaba is participating and being an important player.