Alibaba Group Holding Limited (NYSE:BABA) is ramping up its push into consumer-facing artificial intelligence, committing billions of yuan to a Lunar New Year promotion.

Alibaba said it will spend 3 billion yuan ($432 million) to promote its Qwen AI app during the Spring Festival, joining rivals Tencent Holding Ltd (OTC:TCEHY) and Baidu Inc (NASDAQ:BIDU) in rolling out red-packet giveaways to drive mass-market adoption.

The campaign, which officially launches on Feb. 6, will include incentives such as lottery-style free orders and cash-filled red envelopes.

Alibaba said the effort positioned Qwen as more than a chatbot. Instead, the app acts as a personal AI agent that can carry out tasks directly across Alibaba's platforms.

AI Red-Packet War Intensifies Across China's Tech Giants

Alibaba's move escalates an already fierce competition among China's largest tech companies during the Lunar New Year.

Tencent and Baidu recently announced plans to spend 1 billion yuan and 500 million yuan, respectively, to promote their consumer AI apps through similar holiday incentives.

Alibaba Pushes Full-Stack AI Strategy

Alibaba overhauled its AI chatbot in November, relaunching it as Qwen and powering it with the latest version of its proprietary large language models.

The company said the app surpassed 100 million monthly active users within two months.

Alibaba's chip design arm, T-Head, released technical details for its Zhenwu 810E parallel-processing unit.

The company said the chip targets the heavy data demands of generative AI and delivers performance broadly comparable to Nvidia's China-focused H20 processor.

Alibaba stock gained 72% in the last 12 months.

BABA Price Action: Alibaba Gr Hldgs shares were down 0.18% at $169.25 at the time of publication on Monday, according to Benzinga Pro data.

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