Alibaba Bets Big On AI And Tokenized Payments

Alibaba is attempting integrate e-commerce and improved AI functions. Photographer: Paul Yeung/Bloomberg © 2025 Bloomberg Finance LP

Chinese e-commerce giant Alibaba Group Holding is embarking on a significant overhaul of its main mobile AI application, aiming to mirror the design and capabilities of OpenAI's popular ChatGPT. This strategic initiative is part of a larger effort to catch up with major competitors in Asia and establish a new business model centered on individual users, as reported by Bloomberg.

Alibaba's AI Play The Qwen Revamp

The company plans to start by updating its Tongyi apps on both iOS and Android, rebranding them under the new name Qwen. This name is derived from Alibaba's well-known AI model. In the upcoming months, Alibaba will enhance Qwen with more sophisticated agent-like features designed to assist users with shopping across its platforms, including the massive Taobao marketplace.

This relaunch represents one of Alibaba's most significant moves to generate consumer revenue from artificial intelligence. The online retail powerhouse, alongside competitors like Minimax and TikTok parent ByteDance, is in a heated race to develop advanced AI models that can rival the performance of industry leaders like OpenAI and DeepSeek. The ultimate goal is to transform Qwen into a comprehensive AI agent, a key objective for the entire retail sector worldwide.

Alibaba also has plans to launch an international version of Qwen. To support this ambitious redesign, a team of over 100 engineers from various departments has been assembled, reflecting the major AI investment push announced by Alibaba's Chief Executive, Eddie Wu, in September.

Competing in a Crowded AI Market

Currently, Qwen's user engagement is behind competitors such as ByteDance's Doubao and Tencent Holdings' Yuanbao. To close this gap, Alibaba is leveraging its core strength in e-commerce. By integrating shopping-related functionalities, the company hopes to attract a larger user base, particularly as the e-commerce landscape shifts towards AI-driven purchasing models.

Alibaba currently maintains the Tongyi consumer apps and a separate, less-featured Qwen Chat app. The plan is to merge these into a single, unified product under the Qwen brand. For now, the revamped application will be free to use. However, by building a large and active user base, Alibaba could introduce paid premium services in the future, helping it stand out in an increasingly competitive market.

Revolutionizing Payments with Tokenization

In addition to its AI ambitions, Alibaba is set to transform the payment infrastructure within its $35 billion cross-border e-commerce ecosystem. The company is betting on tokenization to create the next generation of global settlement systems.

In a recent interview with CNBC, Alibaba President Kuo Zhang revealed that the company is developing a new payment network. This network will use a tokenized, stablecoin-like system to streamline and simplify international B2B transactions. The company aims to launch this innovative platform before the end of the year.

A Broader Strategy for AI Dominance

These initiatives are part of a comprehensive strategy outlined by CEO Wu in September. His plan involves creating new models and a complete AI stack, showing Alibaba's determination to lead in both consumer-facing services and the foundational infrastructure that powers them, including semiconductor chips.

This is not Alibaba's first attempt to bring AI tools to the public. The company previously revamped its Quark search app to function as a general-purpose AI assistant, and this app will remain operational. These efforts appear to be paying off, as Alibaba reported triple-digit growth in its AI-related services in its most recent financial quarter. The company's cloud division also surpassed expectations, emerging as its fastest-growing business segment.