Alibaba Group Holding Limited (NYSE:BABA) is stepping up its artificial intelligence strategy as open-source adoption accelerates and Wall Street grows more confident in the company’s long-term AI positioning.
The company is leaning harder into open-source AI as adoption of its Qwen models surges and analysts re-rate the stock.
The Chinese e-commerce juggernaut said Tuesday that “a defining feature” of its 2025 AI approach was “its commitment to openness,” arguing that open-source software helps developers and companies build faster and at lower cost.
Qwen Adoption Hits Major Milestone
The comments followed Monday’s jump in Alibaba’s U.S.-listed shares after its Qwen model family surpassed 700 million downloads on Hugging Face, making Qwen the most widely adopted open-source AI system, SCMP reported on Tuesday.
The report also pointed to industry validation for the company’s approach, including a Stanford report saying Chinese open-source models have caught up or even moved ahead of U.S. peers in capability and adoption, and it highlighted Nvidia Corp.’s (NASDAQ:NVDA) Cosmos-Reason1-7B as an example of a model post-trained on Qwen2.5-VL-7B-Instruct.
Meta Platforms Inc. (NASDAQ:META) has adopted Alibaba’s open-source Qwen models as part of its effort to rebuild its AI stack.
Cloud Investment Fuels Stock Rally
Alibaba stock climbed about 14% over the past week after the company sharply increased its capital expenditure budget for Alibaba Cloud, Futunn reported. Analysts said the stepped-up investment could drive profitability resilience beyond current forecasts.
The rally builds on a powerful longer-term run, with Alibaba stock up roughly 104% over the past 12 months, fueled by growing investor confidence in the company's AI initiatives and a more supportive regulatory environment in China.
Domestically, Alibaba formed the Qwen Consumer Business Group to bring its chatbot, AI assistants, cloud tools, and AI hardware under one platform.
Analyst Commentary Highlights Cloud Growth
Charlene Liu, HSBC's Asia-Pacific head of internet and gaming research, said in a Friday research note that Alibaba's cloud business is positioned to sustain revenue growth as long as demand tied to artificial intelligence remains strong.
Alibaba Group chairman Joe Tsai reiterated the company's monetisation logic for open-source AI models at a November event in Hong Kong, stressing that the group does not generate revenue directly from AI itself.
"We run a cloud computing business," Tsai said. "When you run models, you need to have cloud infrastructure… If people are running AI and they happen to want to use Alibaba Cloud, we have a whole suite of products from storage to data management to security to networking to containers."
BABA Price Action: Alibaba shares were up 3.64% at $173.09 during premarket trading on Wednesday, according to Benzinga Pro data.
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