Companies / Alibaba (Qwen)
Cloud and frontier AI lab
Alibaba (Qwen)
State of play as of
The company that gives away the world’s most-downloaded open-weight models and sells the compute they run on.
Alibaba is the only name in Chinese AI that sits on both sides of the trade. Its Tongyi lab publishes the Qwen family, reported to be more than half of every open-source model download on earth, and Alibaba Cloud rents out the compute that Qwen and its competitors are served from, booking rivals’ models as its own revenue. In 2026 it began closing the last gap by designing the accelerator underneath, and it is funding all of it out of a capex line it has never broken out. We track what Qwen ships, what the cloud earns, and the number Alibaba has not disclosed, with dates and sources.
Fast facts
- What it is
- Two arms. The Tongyi lab publishes the Qwen (通义千问) model family, and Alibaba Cloud sells the compute those models and their competitors run on.CAD reporting
- Chief executive
- Wu Yongming (Eddie Wu), who fronts the AI capex case on the quarterly calls.Alibaba June-quarter analyst call, via Sina Finance
- Open-weight position
- Qwen passed a billion Hugging Face downloads in spring 2026 and is reported to take more than half of all open-source model downloads worldwide, near 1.1 million a day. Treat the share figure as one circulating report’s, directional rather than audited.SCMP, via CAD
- Flagship model
- Qwen3.8-Max, announced 3 August 2026 at 2.4 trillion total parameters and aimed at coding and office work, with a 0902 snapshot following on 2 September. Alibaba discloses parameter counts for some Qwen releases and not others.TechNode; QbitAI, via CAD
- Cloud, June 2026 quarter
- External commercial revenue grew 45 percent, the fastest in twenty-two quarters. AI cloud and compute services revenue was 48.437 billion yuan and AI-related product revenue 12.376 billion, a twelfth consecutive quarter of triple-digit annual growth.Alibaba June-quarter results via Sina Finance and TMTPost
- What it spends
- Capital expenditure of 67.678 billion yuan in the June quarter, up 75 percent year on year, against 10.537 billion yuan of net profit attributable to shareholders, which fell 76 percent.Alibaba June-quarter results via Sina Finance and IT之家
- Its own silicon
- T-Head. Zhenwu M890 supernode instances went on sale at scale on Alibaba Cloud and had served more than 650 customers by early August 2026, and Wu said a second-generation T-Head accelerator would tape out and enter production in the second half of 2026.Wu Yongming on the June-quarter call, via Sina Finance; TechNode
- What it has not disclosed
- How much of that capex is AI-related. The company told investors it can recoup AI-related capital expenditure within three years at current average gross margin, and has never published the denominator that claim rests on, so nobody outside Alibaba can check it.Alibaba June-quarter disclosure via Sina Finance; CAD analysis
The state of play
Alibaba placed 80 billion Hong Kong dollars of new shares, roughly 68.8 billion yuan or about 10.2 billion dollars, to non-US persons outside the United States, and stated the use of net proceeds as 100 percent investment in full-stack AI capability and infrastructure. It was the company’s first placement since its 2019 Hong Kong listing. Read it against the quarter reported days earlier, where capital expenditure of 67.678 billion yuan ran more than six times net profit: the placement is what financing a capex line of that size out of something other than operating cash flow looks like.
Wu Yongming said the second generation of Alibaba’s T-Head accelerator would tape out and enter production in the second half of 2026, with the claim that it can carry large-model training rather than inference alone. The supernode built on the current Zhenwu M890 is already in volume sale and the line had served more than 650 customers by early August. The same week Alibaba Cloud brought a third Korean data centre online, taking its network to 104 availability zones. A company that designs the accelerator it rents out has a shorter payback path than one buying Nvidia, which is the argument the capex rests on and is not yet proven at the training tier.
Alibaba expects model and application services, including its Bailian platform, to pass 30 billion yuan of annualised revenue by the end of 2026. The shape of how that revenue is booked is the part worth holding onto: Alibaba Cloud, Tencent Cloud and ByteDance’s Volcano Engine are all reported to be losing money serving other labs’ models, Zhipu’s GLM, Moonshot’s Kimi and DeepSeek among them, while booking the full contract value as their own revenue. Selling your own product below cost is an ordinary land grab; the product being discounted here belongs to somebody else.
On its June-quarter results Alibaba told investors that, calculated roughly at current average gross margin, it can recoup AI-related capital expenditure within three years. The numbers around the claim are strong and the claim itself cannot be checked. Alibaba Cloud external commercial revenue grew 45 percent, the fastest in twenty-two quarters; AI cloud and compute services revenue reached 48.437 billion yuan; annualised revenue from AI-related products passed 49.5 billion yuan. Against that, quarterly capital expenditure was 67.678 billion yuan, free cash flow was a net outflow of 44.670 billion, and the company has never broken out how much of the capex line is AI-related. Without that denominator the three-year promise is not verifiable from outside.
Alibaba open-sourced Qwen3.8 and said the family had passed three billion cumulative downloads. Qwen3.8-27B is a natively multimodal dense model at 27 billion parameters under Apache 2.0, and quantized it runs on a consumer graphics card. Alibaba puts its cumulative open-source releases above 460 models and derivative models built on Qwen above 300,000. Those are company-reported figures and are not independently audited.
Reuters reported that Alibaba plans to charge heavy commercial users of its next open model by taking a share of the revenue they earn from it, which would extend its billing to self-hosted deployments for the first time. This is reported rather than announced, and Alibaba has not confirmed the terms. What makes it legible is the download position it would be metering: you do not attempt to charge for something people can get free somewhere else, so the plan is a statement about how durable Alibaba believes the Qwen lead to be.
Our reporting on Alibaba (Qwen)
- The Base Model
Harvey, the OpenAI-backed legal AI company, published its first post-trained model on 20 August. Harvey Tenet is a Kimi K3 base, post-trained with a rank-64 LoRA over the full network on a dataset of about 1,750 tasks. It completes almost twice as many held-out tasks on the Legal Agent Benchmark as base Kimi K3, and places second on that benchmark overall. Harvey ran ablations on candidate judge models against heavier frontier models and settled on Kimi 2.6 as the grader. Its M&A diligence work uses a GLM-5.2 orchestrator, taking rubric criteria pass rate from a 43.8 percent best baseline to 60.1 percent after self-distillation post-training.
- The Register
The Central Cyberspace Affairs Commission published a 2026 to 2030 action plan for cyber-information enterprises on 21 August: seven actions and twenty-one measures. Measure 1 orders a continuously updated national database of these firms, with classification and grading standards sorting them into three named tiers. Measure 19 tells regulators to speed up domestic listing review and to open non-IPO exits through S-funds and M&A funds, and tells banks to treat patents, trademarks and data as credit-assessment inputs. Measure 16 orders administrative inspections regulated so as to minimise disruption to normal operations, and Measure 5 names high-end AI chips, high-performance training clusters, world models, agents and embodied intelligence.
- The Paying Tier
Chinese cloud vendors are reselling competitors’ models at roughly 30 percent of list price, below their own cost, because in AI coding the customer names the model. Leiphone reported the discount ladder on 21 August from named cloud sales sources: 60 to 80 percent of list six months ago, 48 percent now common, roughly 30 percent at the low end. The same day, Approaching.AI vice-president Guan Jiawei told the South China Morning Post that domestic chips can only serve the low-quality inference tier, the one with weak demand and weak monetisation, and that high-quality tokens, especially coding, still depend on Nvidia. iFlytek said the same week that a flagship model trained entirely on domestic compute would reach the domestic first tier on code capability.
- The Internship
Forty-eight central state-owned enterprises appeared together at the World Robot Conference in Beijing on 19 August, showing twelve application scenarios under a joint MIIT and SASAC notice that orders each central enterprise to open at least ten real work stations and each designated province at least twenty, targeting more than a hundred high-value scenarios by the end of 2026. The next morning on the same stage Unitree founder Wang Xingxing said robots are not yet efficient or general enough to be rolled out into factories at scale, and put embodied AI’s ChatGPT moment two to three years away at best. His stock fell 16.05 percent that day.
- The Giveaway
DeepSeek open-sourced Harness, an MIT-licensed agent framework, on 13 August. Within four days its repository had passed both anthropics/claude-code and openai/codex on GitHub stars, 148,734 against 141,759 and 106,470, while Anthropic’s repository carries no open-source license at all. The caveats are in the same API response: Harness is a pre-1.0 release candidate with its public issue tracker switched off, and stars measure attention rather than use.
- The Firm Flag
Alibaba’s Qwen now accounts for more than half of every open-source AI model download on earth and has passed a billion downloads on Hugging Face, displacing Meta’s Llama, per SCMP and Pandaily, though those share figures trace to a single report. The lead is firm enough that Alibaba plans to start charging heavy users of its next open model, and in the same week Meta and Nvidia both re-entered the open-weight market they had backed away from, Meta with Muse Glimmer and Nvidia with Nemotron 3.5 Lightning, explicitly to catch the Chinese labs now setting the open-source default.
These link to the full issues on the newsletter. New pieces go out in the daily first.
Common questions
What is Qwen?
Qwen (通义千问) is Alibaba’s large-language-model family, built by its Tongyi lab and released mostly under permissive open-weight licences. Its current flagship is Qwen3.8-Max, announced on 3 August 2026 at 2.4 trillion total parameters, with a 0902 snapshot following on 2 September that Chinese coverage placed first in the world on front-end coding. Qwen3.8-27B, a natively multimodal dense model, is published under Apache 2.0 and runs quantized on a consumer graphics card.
Is Qwen the most-used open-source AI model?
By download share it is reported to be. SCMP, citing a single circulating report, put Qwen above half of all open-source model downloads worldwide in 2026, running near 1.1 million a day, after it passed a billion cumulative Hugging Face downloads and displaced Meta’s Llama. Alibaba separately says the family has passed three billion downloads and that more than 300,000 derivative models have been built on it. Both sets of figures are company-reported or single-source and should be read as directional rather than audited. Download share is also not the same as inference volume: OpenRouter’s weekly token leaderboard for the seven days to 16 September 2026 is led by Tencent, Z.ai and DeepSeek builds, with no Qwen model in its top ten.
Is Alibaba making its own AI chips?
Yes, through T-Head. Its Zhenwu M890 supernode instances are on sale at scale on Alibaba Cloud and had served more than 650 customers by early August 2026. Chief executive Wu Yongming said on the June-quarter call that a second-generation T-Head accelerator would tape out and enter production in the second half of 2026, with the claim that it can carry large-model training and not inference alone. That last claim has not been demonstrated publicly.
How much is Alibaba spending on AI?
More than it will itemise. Capital expenditure in the June 2026 quarter was 67.678 billion yuan, up 75 percent year on year, against net profit attributable to shareholders of 10.537 billion, down 76 percent, and a free-cash-flow outflow of 44.670 billion. In August 2026 it placed 80 billion Hong Kong dollars of new shares with the stated use of proceeds being 100 percent full-stack AI. The company says it can recoup AI-related capital expenditure within three years at current average gross margin, but it has never disclosed how much of the capex line is AI-related, so the claim cannot be checked from outside.
Every dated fact above traces to a named source, and where it comes from our reporting, to the dated issue that carried it. Where a claim is self-reported or disputed, we say so.