The spending plan, set to begin on February 6, marks a significant increase compared with rival promotions. Tencent and Baidu previously announced they would spend 1 billion yuan and 500 million yuan respectively on similar campaigns for their AI chatbot platforms.
Alibaba said the campaign will include incentives across dining, drinks, entertainment and leisure, with “large red envelopes distributed continuously,” although the company did not clarify whether the rewards would be cash or discount coupons redeemable on its platforms such as Taobao.
Chinese tech companies have historically used the Lunar New Year holiday to drive rapid user growth, as hundreds of millions travel and spend time with family. The holiday period this year begins on February 15 and lasts nine days, longer than in most previous years.
The move highlights the intensifying rivalry in China’s AI sector, which has accelerated since last January when DeepSeek’s R1 model disrupted global AI markets and sparked faster adoption and increased competition among domestic players.
Tencent’s campaign, targeting its Yuanbao chatbot app, starts on Sunday and requires users to upgrade to the latest version to claim digital red envelopes, which can be withdrawn to WeChat wallets. Users can also earn rewards by sharing links with others.
Meanwhile, other Chinese AI firms are also preparing new launches ahead of the holiday. DeepSeek is expected to release its next-generation V4 model, with advanced coding capabilities, in mid-February, according to The Information.
Alibaba’s latest spending commitment signals a fierce battle for AI dominance in China as tech giants leverage festive spending and user incentives to build market share and expand adoption.