Alibaba plans major shake-up to increase focus on AI profits

issued Monday, March 16, 2026 · 07:24 PM

[HONG KONG] Alibaba Group Holding is setting up a business unit to bring its sprawling AI services and development efforts under one umbrella, signaling its determination to profit from artificial intelligence.

The company will transfer its flagship Qwen model, consumer apps division, and research teams that develop key AI-related products to the division led by CEO Eddie Wu. The new division, simply called Alibaba Token Hub, will also oversee Alibaba’s Slack-like DingTalk app and Quark-branded devices such as smart glasses, Wu said in a memo to employees seen by Bloomberg News.

The revamp comes as Alibaba grapples with questions about its AI strategy following the recent sudden departure of Qwen’s star research director. The aim is to speed up interaction between the various teams that support Alibaba’s wide-ranging efforts, from researchers to product development and design. This also shows that the company has a clear focus on monetizing AI. The name of this division is a direct reference to the units of computing that companies charge users.

Alibaba has not disclosed whether it will make any new investments as part of the overhaul. It also aims to strengthen its sales pitch to enterprise AI customers and encourage adoption of Qwen, a GPT-like model that helped establish Alibaba as an early frontrunner in China.

Domestic AI-hopeful companies from Alibaba to MiniMax Group are finding it harder than Western rivals such as OpenAI to turn AI advances into profits, given Chinese consumers’ reluctance to pay subscription fees for software. Most of China’s models are open source and free to download, creating a huge revenue disparity between the country’s leading developers and their US peers such as Anthropic PBC.

“ATH is built around a single organizing mission: token creation, token distribution, and token application,” Wu said in the memo. I will directly lead ATH and be tasked with driving strategic alignment across the AI ​​business, deeply embedding AI into the way we work, and maintaining the agility that enables us to move quickly. ”

Alibaba, which is scheduled to report quarterly results on Thursday (March 19), was primarily focused on selling AI and cloud computing solutions to enterprises until it revamped its Qwen app for consumers last year. But despite spending billions of yuan on its “Red Packet” consumer promotion during last month’s Lunar New Year holiday, the app still lags behind rival ByteDance’s Doubao. With this reorganization, Alibaba is likely to allocate more resources to its enterprise businesses.

Alibaba plans to release a dedicated agent AI service for enterprises in the near future, according to people familiar with the matter. We’re counting on the public’s enthusiasm for artificial intelligence assistants like OpenClaw that help users perform real-world tasks.

The Chinese company could launch a new AI agent product based on its flagship model Qwen and customized for enterprises as soon as this week, according to people familiar with the matter. The company plans to gradually integrate other services with the agency, including online shopping site Taobao and fintech platform Alipay, said the people, who requested anonymity to discuss private plans. The tool was developed by the team behind DingTalk, the person added.

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Mr. Wu was one of Alibaba’s original co-founders and served as CEO of the group and Alibaba’s cloud division since 2023. Last year, he outlined plans to have Alibaba build a full stack of AI products, including hardware, and pledged to invest more than $53 billion in emerging technologies.

“By 2026, Alibaba plans to deepen its agent AI ecosystem across Taobao, Amap and Alipay, leveraging Kwen to move users from intent to payment within a single conversation,” said Bloomberg Intelligence analysts Katherine Lim and Jason Zhu. “By compressing search, recommendations, checkout, and fulfillment into one platform, Qwen can reduce funnel drop-offs while increasing conversion and order frequency, especially in food delivery and instant retail. As richer intent data accumulates, Alibaba can roll out more targeted offers and scale back discounts while maintaining engagement.”

But this month, Qwen’s architect abruptly resigned, upsetting the developer community and raising questions about the Chinese online leader’s pivot to artificial intelligence. Junyang Lin is one of the most influential people behind Alibaba’s AI transition, an effort aimed at driving its next phase of growth beyond online commerce. During his tenure, the Qwen series of models became the foundation of Alibaba’s core AI apps and services, consistently ranking among the world’s top performing platforms.

In the days that followed, Alibaba sought to quell widespread speculation that Mr. Lin’s departure would prompt further resignations. bloomberg