In the rapidly evolving landscape of global artificial intelligence (AI), one company is redefining its role from a traditional e-commerce giant to a key architect of the AI-driven future—Alibaba Group Holding Ltd. Founded in 1999 by Jack Ma, Alibaba started as a platform to connect Chinese manufacturers with overseas buyers. Over the past two decades, it grew into an e-commerce behemoth through platforms like Taobao and Tmall. Today, it is taking bold strides in becoming China’s leading AI innovator and incubator, fueling both foundational technologies and nurturing the next generation of tech entrepreneurs.
From Marketplace to Tech Ecosystem Enabler
While Alibaba’s core e-commerce platforms still generate the majority of its revenue, the company’s pivot towards AI began gaining serious momentum in 2023, when Wu Yongming took over as CEO. Wu initiated a company-wide transformation with the motto “user-first, AI-driven,” turning Alibaba into not just a user platform, but an enabler of AI-powered solutions across China.
Alibaba’s approach to AI extends beyond internal development. It actively supports and incubates talent from within. More than 85 AI startups had been founded by former Alibaba employees by the end of 2024, with 45% located in Hangzhou—the city where Alibaba’s headquarters are based. These companies are making significant technological advances, especially in areas like augmented reality, robotics, and generative AI.
One standout example is Rokid, a smart glasses startup founded by Zhu Mingming, a former Alibaba engineer. With early backing from Vision Plus Capital—a venture firm with strong Alibaba connections—Rokid quickly rose to prominence. Today, its AI-powered AR glasses are gaining attention in the market, showcasing the deep technical and managerial training Alibaba offers its workforce.
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Qwen: The Foundation of Alibaba’s AI Ambitions
Alibaba’s in-house Qwen models have been at the heart of its AI rise. These large language models (LLMs) are open-source and rank among the top globally. The most recent flagship model, Qwen2.5-Max, has outperformed several competing models, including DeepSeek-V3, in benchmark tests. The company has also announced plans to launch its next-generation model in 2025.
What’s unique about Qwen is its open-source strategy. Developers across the world have created over 100,000 derivative models based on the Qwen architecture. This makes Qwen the world’s largest open-source AI ecosystem, surpassing even Meta’s LLaMA. According to Alibaba’s internal data, Qwen’s capabilities are being used in academic research, enterprise solutions, and public-sector AI deployments.
Renowned AI scientist Li Feifei and her Stanford research team trained a powerful reasoning model for under $50 using Qwen, demonstrating the model’s versatility and accessibility.
Building Infrastructure at Scale
To support its AI ambitions, Alibaba has committed to massive infrastructure investments. In February 2025, it pledged 380 billion yuan ($52.4 billion) towards computing resources and AI infrastructure over the next three years. This is the largest capital investment ever made by a private Chinese firm in this domain.
Alibaba’s cloud computing division—the largest in China—is central to this push. Its cloud platform not only runs Qwen but also provides AI services to businesses and local governments across China. As of early 2025, over 80% of roles at Alibaba Cloud are AI-related, reflecting the company’s deep commitment to the field.
The company has also launched the AI Clouder Programme, targeting top graduates from universities like Tsinghua, Zhejiang University, and global institutions such as Stanford and MIT. The program seeks experts in LLMs, multimodal AI, infrastructure, and real-world applications. Competitive salaries and academic collaborations make this a key part of Alibaba’s talent strategy.
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Supporting the Entrepreneurial Ecosystem
Alibaba’s influence extends beyond just infrastructure. Its culture of collaboration and experimentation has inspired former employees to become successful entrepreneurs. From robotics to deep learning, ex-Alibaba employees are now leading ventures that are reshaping China’s tech scene. The city of Hangzhou has especially benefited from this talent exodus, with multiple startups becoming household names.
Alibaba actively maintains relationships with these alumni. According to former Alibaba Cloud employee Wang Jie, the company frequently invites ex-staff for idea-sharing sessions and maintains open lines of communication.
DeepSeek vs. Alibaba: Friendly Rivalry Fuels Innovation
While DeepSeek, another major Chinese AI player, has garnered headlines for its cost-effective and high-performance models, its focus remains largely research-oriented. In contrast, Alibaba not only builds models but also educates users and commercializes its AI tech at scale.
Alibaba’s size and government partnerships offer it a significant edge in deploying AI solutions across sectors such as manufacturing, finance, education, and public services. With nearly 200,000 employees and a robust institutional network, Alibaba is uniquely placed to bridge innovation with implementation.
RISC-V and Open Hardware Revolution
Alibaba’s Damo Academy is spearheading a revolution in AI hardware through its investment in RISC-V—an open-source processor architecture. In February 2025, it released its first server-grade RISC-V CPU, enabling scalable AI workloads without reliance on US-made chips.
This initiative is crucial, especially amid tightening US export restrictions on semiconductors and AI technologies. Experts argue that RISC-V may allow China to bypass these sanctions and promote self-reliant innovation.
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Challenges Amid US-China Tech Tensions
The road ahead isn’t without hurdles. US-China tech tensions are escalating, especially in AI and semiconductor sectors. New restrictions could limit Alibaba’s access to advanced GPUs and other key hardware, potentially slowing development. However, analysts believe this could also act as a catalyst for domestic innovation.
Alibaba’s diversified approach—spanning open-source models, proprietary research, infrastructure, and hardware—puts it in a strong position to weather these challenges.
Frequently Asked Questions (FAQs)
1. What is Alibaba’s role in China’s AI industry?
Alibaba is a leading force in AI, offering foundational models like Qwen, building AI infrastructure, and supporting AI startups through funding and talent development.
2. What is the Qwen model?
Qwen is Alibaba’s family of open-source large language models, used for various AI applications and widely adopted by developers globally.
3. How is Alibaba investing in AI infrastructure?
Alibaba is investing 380 billion yuan over three years to expand its cloud and AI infrastructure across China.
4. What makes Alibaba different from other AI players like DeepSeek?
Unlike research-centric DeepSeek, Alibaba commercializes AI tech, partners with governments, and supports users and startups alike.
5. What is the AI Clouder Programme?
It is Alibaba Cloud’s global recruitment initiative targeting top AI talent from Chinese and international universities.
6. How does Alibaba support ex-employees in entrepreneurship?
The company fosters a collaborative culture and offers post-employment support, mentorship, and sometimes funding for startup ideas.
7. What is the significance of RISC-V in Alibaba’s AI strategy?
RISC-V allows Alibaba to develop AI chips free from US sanctions, supporting national tech independence and innovation.
8. Are Qwen models used internationally?
Yes, over 100,000 Qwen-based models have been developed globally, making it the world’s largest open-source AI model ecosystem.
9. What’s the future outlook for Alibaba in AI?
Alibaba aims to develop artificial general intelligence (AGI) and become a global AI leader, despite geopolitical and market challenges.
10. How does Alibaba compare with Western AI giants like OpenAI or Meta?
While OpenAI focuses on closed-source models, Alibaba is building the world’s largest open-source AI ecosystem, promoting widespread accessibility.