Alibaba’s Dual-Pronged AI Strategy Gains Momentum

Alibaba Group is accelerating its artificial intelligence initiatives through two simultaneous, high-profile launches. The Chinese technology giant's latest moves—an open-source robotics model and a heavily subsidized consumer AI application—drove its shares approximately 2.2% higher, closing at $166.55 on the New York Stock Exchange.

The company's "Qianwen" AI application captured immediate market attention with a substantial subsidy campaign valued at 3 billion renminbi (roughly $420 million). This aggressive push for user growth yielded over 10 million orders within the first nine hours, propelling the app to the top of the free app rankings on China's Apple App Store. The overwhelming demand led to technical strain, however, with Alibaba announcing on February 10 that its free vouchers were depleted faster than anticipated.

A New Challenger in Embodied AI

Concurrently, Alibaba introduced "RynnBrain," a new open-source model targeting the field of physical AI, or embodied intelligence. Developed by its DAMO Academy research division, the model is designed to integrate spatial understanding with temporal perception. This combination aims to enable robots to navigate complex environments and predict movement sequences.

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The company asserts that RynnBrain has outperformed established benchmarks, specifically citing superior results against Google's Gemini Robotics-ER 1.5 and Nvidia's Cosmos-Reason2 across 16 open-source benchmarks for embodied AI. Seven open-source versions are now accessible to developers globally, including a 30-billion-parameter model built on a Mixture-of-Experts architecture.

Profitability Questions Loom Amid Heavy Investment

While these technological advances generate buzz, significant questions remain regarding their impact on Alibaba's bottom line. The company's adjusted EBITA has already faced pressure in recent quarters from substantial strategic expenditures. The massive investments in cloud infrastructure and now consumer AI subsidies place further focus on margin development.

All eyes will be on the upcoming financial results scheduled for release on February 19, 2026, covering the third quarter of fiscal year 2026. Market analysts are expected to scrutinize whether the billion-dollar push into artificial intelligence will translate into medium-term financial returns.