Chinese tech companies have fallen far behind US peers in market value. Nine years ago Alibaba and Amazon both neared $500bn market caps; today Amazon is worth $3tn while Alibaba is worth a tenth of that. The Hangzhou-based firm hopes to regain investor confidence with its new AI model Qwen 3.8-Max, which benchmarks well in areas like agentic coding.

Alibaba's share decline stems more from political troubles than AI deficiency. Beijing reined in Alibaba and Tencent; the US restricts China's access to advanced chips; the EU fined Alibaba for marketplace failures. Capital expenditure of $18.3bn last year led to negative free cash flow, with inflows not expected to surpass 2024 levels until 2031 per Visible Alpha.

Alibaba's ecommerce and cloud divisions support AI investment. Like Microsoft, it offers "model as a service" via cloud. The bifurcated tech world forces innovation: Alibaba has proprietary chips, and Apple approved AI devices in China using Qwen. CEO Eddie Wu projects AI will comprise half of external cloud income by 2027.

Qwen's open-weight model is more commercial than fully open-source. The race is to make AI that pays its way; Alibaba remains competitive.