TLDR
- Alibaba shares climbed 4% in Hong Kong after releasing its new Qwen3-Max-Preview AI model with over one trillion parameters
- The model outperforms the company’s previous Qwen3-235B offering and represents their largest AI advancement to date
- Cloud division revenue grew 26% year-over-year in the June quarter, with AI product revenue posting triple-digit growth for eight straight quarters
- The company is developing a proprietary AI processor to reduce dependency on U.S.-made Nvidia chips
- Despite cloud growth, overall revenue remained flat due to continued weakness in the core e-commerce business
Alibaba shares jumped as much as 4% to HK$138.0 in Hong Kong trading on Monday morning. The surge came after the Chinese tech giant unveiled its most advanced artificial intelligence model yet.
The company released the Qwen3-Max-Preview model late last week. This new offering features over one trillion parameters, making it Alibaba’s largest and most intelligent AI model to date.

The model outperforms the company’s previous flagship offering, Qwen3-235B. Alibaba has positioned this release as a direct challenge to AI leaders like OpenAI and Google DeepMind.
The timing of the release appears strategic. Competition in the AI space has intensified rapidly this year, with major tech companies racing to develop more powerful models.
Cloud Division Powers Growth
Alibaba’s cloud business has emerged as a bright spot in recent quarters. The division delivered impressive 26% year-over-year revenue growth in the June quarter.
This growth reflects surging demand for AI infrastructure and services. More importantly, AI product revenue has now posted triple-digit growth for eight consecutive quarters.
The cloud division sits at the heart of Alibaba’s AI ambitions. Management has steadily invested in this area while open-sourcing several advanced models throughout 2025.
These investments appear to be paying off. The cloud business helped offset weakness elsewhere in Alibaba’s portfolio during the most recent quarter.
Chip Independence Strategy
Reports emerged last week about Alibaba developing a proprietary AI processor. This initiative aims to reduce the company’s reliance on U.S.-made chips from Nvidia.
The move comes as Beijing has expressed increased scrutiny toward foreign-made semiconductors. Geopolitical tensions have made chip access a strategic priority for Chinese tech companies.
For Alibaba, achieving chip independence could prove crucial for its AI roadmap. U.S. export restrictions have created uncertainty around access to advanced semiconductors.
The company joins other Chinese tech giants in pursuing domestic chip alternatives. This trend has accelerated as trade tensions persist between Washington and Beijing.
Core E-commerce Challenges Persist
Despite the AI progress, Alibaba’s traditional e-commerce business continues to struggle. The June quarter results showed overall revenue growth of just 2%, though this improved to about 10% after adjusting for business disposals.
Domestic consumption remains sluggish in China. High youth unemployment and weak consumer confidence have weighed on retail spending patterns.
Competition has intensified from platforms like Pinduoduo and Douyin. These rivals have captured market share through aggressive pricing and innovative shopping formats.
Alibaba has responded with initiatives like Taobao Instant Delivery in the quick commerce space. However, these efforts remain unprofitable while requiring heavy investment.
The company did report a 25% increase in monthly active consumers on the Taobao app during the first three weeks of August. This suggests user engagement metrics are improving despite revenue headwinds.
Management has also restructured operations by combining Taobao, Tmall, Ele.me, and Fliggy into one unified commerce division. The goal is to reduce duplication and sharpen competitive focus.
Alibaba reported about $303 billion in market capitalization as of recent trading. The stock trades well below its 2020 peak above $300 per share, reflecting years of regulatory pressure and competitive challenges.
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