Alibaba said on Monday it would spend 3 billion yuan ($431 million) to attract users to its Qwen AI app during the Lunar New Year holiday, intensifying competition between China’s biggest tech companies.
The pledge by Alibaba, which triples spending previously pledged by rivals Tencent and Baidu, is scheduled to begin on February 6. It includes food, drink, entertainment and leisure incentives, and “big red envelopes will be distributed on an ongoing basis,” Alibaba said in a statement.
Tencent and Baidu announced late last month that 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 of people return home to spend time with their families, as a marketing battleground to win new users.
The most notable example was in 2015, when Tencent leveraged its WeChat messaging app to distribute digital red envelopes, helping boost the standing of its WeChat Pay service against Alipay, which dominated China’s mobile payments market at the time.
This year’s holiday begins on February 15th and is longer than previous years at nine days.
Competition in China’s AI space has accelerated since DeepSeek launched its R1 model last January, disrupting the global AI market, spurring both accelerated adoption and increased competition among domestic players.
Tencent’s campaign focuses on its chatbot app “Yuanbao” and starts on Sunday. To receive a digital red envelope that can be withdrawn to a WeChat wallet, users must upgrade the app to the latest version. Users can also share links for cash rewards for others to receive.
Alibaba did not say whether the rewards would be distributed as red envelopes of cash or discount coupons redeemable on its platforms such as e-commerce site Taobao.
Several other Chinese AI companies are also releasing upgrades for the holiday season. DeepSeek plans to launch its next-generation AI model V4 with powerful coding capabilities in mid-February, The Information reported.
