On February 25, Alibaba unveiled its latest innovation, the QwQ-Max-Preview model, a sophisticated deep reasoning model built upon the AI foundational large model, Qwen2.5-MaxThis model epitomizes advanced capabilities intended to facilitate complex task resolution and multimodal processing.

This preview version signals the company's commitment to providing cutting-edge technology, with the official release expected shortlyTo streamline access for users eager to experiment with the latest advancements, Alibaba has launched the qwen.ai domain, allowing direct user access and engagement with the model.

In a significant move towards open collaboration, Alibaba announced that both Qwen2.5-Max and its newest reasoning model, QwQ-Max, will be open-sourcedThis progressive step is likely to unleash a wave of innovation among developers and enterprises, enhancing their capabilities in code generation and complex tasks.

Additionally, the initiative includes smaller model versions such as QwQ-32B, which can be easily deployed on local devices, thus encouraging widespread adoption of their technology across various sectors.

During a recent earnings call on February 20 for the third quarter of fiscal year 2025 (referred to as "2025Q3"), Alibaba's CEO, Wu Yongming, emphasized the momentous impact of the new reasoning model, highlighting that by the end of January, the global derivatives of Tongyi Qianwen surpassed an impressive 90,000, positioning Alibaba as the frontrunner among major organizations in this domain.

"In the next three years, Alibaba will intensify its investments focusing on AI as a strategic core aspectThis includes enhancing AI infrastructure, foundational model platforms, and transitioning existing business operations into AI-native applications," Wu stated, outlining a bold vision for the company's future.

In a follow-up statement just four days later, Alibaba declared that it would invest over 380 billion yuan in the construction of cloud and AI hardware infrastructure over the next three years, exceeding the total amount spent in the past decade combined

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This monumental financial commitment reflects the burgeoning competitive landscape in technology, particularly within the realm of artificial intelligence.

Wu believes that AI will bring about a paradigm shift comparable to those seen in significant industrial revolutions, perceiving the explosive potential of this technology in China’s rapidly evolving tech environmentTo this end, Alibaba plans to accelerate its development of cloud and AI hardware infrastructure aggressively.

One of the paramount goals outlined by Wu is the aspiration toward achieving AGI (Artificial General Intelligence), a forward-thinking target that could dramatically expand the scope of possible applications beyond anything currently experienced.

Following six quarters of surging earnings tied to AI, the 2025Q3 financial report showed a notable rebound in Alibaba Cloud's external commercialization revenues, which reached 31.742 billion yuan, representing a 13% year-on-year increaseThe AI-related product revenues within the Alibaba Cloud sector have continually soared, experiencing triple-digit growth over six consecutive quarters.

A year prior, Wu pointed out that reigniting the growth engines of their two core businesses, e-commerce and cloud computing, stood as the highest priority for the Alibaba GroupNotably, the revenue growth rate for Alibaba Cloud in the latest quarter nearly doubled from the previous quarter's 7%. Analysts at Morgan Stanley have referred to Alibaba's market performance as "undervalued."

There is intense competition brewing among domestic and international tech giants, all pouring resources into AI infrastructureFor instance, Amazon plans to invest over $100 billion by 2025 in this sector, while Microsoft anticipates an $80 billion investment in AI data center development within the same time frameChinese companies, including ByteDance and Tencent, are also investing heavily, with expenditures often exceeding hundreds of billions.

Alibaba's record-breaking investment of over 380 billion yuan marks a landmark occasion in the context of China's private sector, establishing it as the largest investment in cloud and AI hardware infrastructure to date

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Analysts suggest this substantial capital outlay will significantly enhance Alibaba's competitive stance in the cloud computing market, with revenue projections indicating a potential doubling in three years.

In mid-February, Alibaba's board member, Cai Chongxin, confirmed that Apple has chosen to collaborate with Alibaba, integrating its Tongyi Qianwen large models to provide AI services for iPhones in China.

Consulting agency Counterpoint Research analyzed that Apple's integration of Tongyi Qianwen’s API would enable enhanced service optimizations within a Chinese context for Apple Intelligence, resulting in elevated user numbers for Alibaba via Apple's active 250 million devices in China.

Through this collaboration, Alibaba Cloud will act as a cloud service provider, offering customized cloud and AI infrastructure services to AppleThe potential effects of this partnership could draw in a larger contingent of B-end customers, bolstering Alibaba's competitive foothold in the global cloud computing market.

Since the start of 2025, Alibaba's Hong Kong stock has skyrocketed nearly 70%, reaching peak values of 140.9 HKD per share, marking a three-year highMany analysts credit the rising stock price to the booming AI landscape.

The process of reassessing Alibaba's value appears to be underwayDuring the February 20 earnings call, the questions posed by analysts overwhelmingly focused on AI advancements, with none addressing the company’s foundational e-commerce operations.

According to Ding Zhechuan, Chief Analyst in the Internet Business sector at China Merchants Securities, the stellar performances of Alibaba’s technological ventures, particularly in e-commerce, are enhancing its valuation recovery potential.

The core e-commerce operations under the Taotian Group—the standard-bearer for Chinese retail—achieved revenues of 136.091 billion yuan in the 2025Q3 reporting period, reflecting a 5% increase year-on-year

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This marked a significant uptick, given that the previous quarter saw only minimal growth of 1% year-on-yearNotably, customer management revenue (CMR) surpassed the 100 billion yuan threshold, rising 9% year-on-year in this quarter.

Despite facing stiff competition from Pinduoduo and newer e-commerce platforms like Douyin, Ding efficiently articulated that improvements in Alibaba's monetization of its e-commerce assets would continue to bolster its certainty in the market, which, coupled with fundamental improvements, would help to elevate overall valuations.

The 2025Q3 financial report also projected that the Alibaba International Digital Commerce Group (AIDC) would achieve its first profitable quarter in the upcoming fiscal yearPrior to this, Jiang Fan, who previously served as AIDC's president, transitioned to take over as CEO of Alibaba's e-commerce division at the end of 2024, thus overseeing both domestic and international e-commerce operations.

Following three months into his new role, Jiang confidently declared during the 2025Q3 earnings call that a clear profitability path exists for international operations, though it remains uncertain if it will surpass the profitability achieved within the Chinese market.

Since being appointed to head the overseas e-commerce sector in 2020, Jiang Fan has rapidly transformed international e-commerce into the fastest-growing segment for Alibaba, with the latest report reflecting a remarkable 32% year-on-year growth for this sector.

Simultaneously, the Taotian Group is grappling with considerable growth pressures, prompting guidance from Alibaba’s founder, Jack Ma, urging a return to core principles—refocusing on Taobao, user engagement, and the essence of the InternetWu Yongming assumed leadership of the Taotian Group in 2024, setting a definitive goal of "user-first" in strategy development.

Post the Chinese New Year holidays, Alibaba's e-commerce division wasted no time outlining its strategic priorities for 2025, with Jiang asserting that the highest agenda would be centered on "growth." He echoed the sentiment that Taobao's successful integration of more payment channels presented substantial opportunities for user growth in China's e-commerce landscape, emphasizing the necessity of continued investments in user engagement.

Alibaba’s strategic reassessment and substantial investments in cloud and AI-related businesses resonate closely with its core e-commerce focus on reconnecting with its user base.

Following a thorough evaluation of new technological cycles and their interaction with its business blueprint, Wu remarked that Alibaba would continue to maintain its concentration on both domestic and international e-commerce operations, as well as its Internet platform offerings.

Highlighting the transformative potential of AI technology, Wu articulated that these advancements would provide formidable opportunities for enhancing user value

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