Key Highlights
- Alibaba is set to implement revenue-sharing agreements for major commercial users of its forthcoming Qwen3.8-Max open-source AI model.
- This strategy follows Moonshot’s Kimi K3 approach, which mandates commercial licensing for platforms exceeding $20 million in yearly revenue.
- Revenue-sharing percentages at Moonshot have reached as high as 30%; Alibaba’s specific terms remain under development.
- The freemium strategy is gaining traction among Chinese AI companies: complimentary access for smaller users, monetization for large-scale deployments.
- Shares of BABA declined 1.34% following the announcement.
Shares of Alibaba (BABA) experienced a 1.34% decline on Friday following a Reuters disclosure that the e-commerce and cloud computing giant intends to implement revenue-sharing agreements with substantial commercial users of its upcoming open-source AI model, Qwen3.8-Max.
Alibaba Group Holding Limited, BABA
The new model could debut within days, potentially as early as next week, based on information provided by two anonymous sources with direct knowledge of the initiative.
Qwen3.8-Max operates as an open-weight model, making its core parameters publicly accessible for download. This architecture allows developers to implement or modify the system independently, distinguishing it from proprietary systems developed by OpenAI, Anthropic, and Alphabet’s (GOOGL) Google.
However, unlimited free access won’t last forever. The company intends to mandate revenue-sharing contracts for high-volume commercial deployments, mirroring a licensing provision embedded in Moonshot’s Kimi K3 model agreement.
Moonshot’s licensing terms stipulate that any organization offering Kimi K3 commercially and surpassing $20 million in annual revenue must negotiate a formal commercial partnership. According to insider information, Moonshot has requested revenue shares reaching 30% in certain cases.
Alibaba is developing a comparable revenue threshold for Qwen3.8-Max. The precise percentage for revenue sharing remains under negotiation, sources indicated.
The Freemium Strategy Takes Hold
This business model has become widespread in the technology sector: the freemium approach. Companies provide unrestricted access initially, then introduce charges once users achieve commercial momentum.
“This represents a proven open-source ‘freemium’ strategy,” noted Paddy Srinivasan, CEO of DigitalOcean Holdings, whose platform provides access to Kimi K3 alongside other Chinese AI models. He acknowledged that DigitalOcean maintains a commercial partnership with Moonshot but refrained from sharing specific terms.
Chinasoft International, an IT services company based in China, publicly revealed a revenue-sharing arrangement with Moonshot in an official filing last month, though the exact percentage was not disclosed.
In the past, Alibaba monetized model access exclusively when developers utilized its cloud infrastructure, while permitting unrestricted use of open-source versions within private data centers. This new licensing framework represents a strategic pivot in the company’s approach to open-source AI.
Market Positioning and Competitive Dynamics
Kimi K3 currently offers pricing approximately one-third lower than Anthropic’s Fable model when comparing published input and output token rates, positioning Chinese AI solutions competitively on cost.
Dan Fu, VP of kernels at Together AI, emphasized that deployment methodology drives real value. “At the application layer, there’s value out there for how you use it, how you actually get the models and the tokens to do something useful,” he explained.
American companies are also entering the open-source arena. Thinking Machines Lab, established by former OpenAI CTO Mira Murati, unveiled its inaugural open-source model last month, with more advanced iterations anticipated.
The White House has leveled accusations against Moonshot regarding technology theft from Anthropic, allegations that Chinese authorities have firmly denied.
Alibaba has not issued official confirmation regarding the Qwen3.8-Max licensing structure. According to sources, the model’s public release is scheduled for next week.
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