Alibaba's New AI Turns Imagination Into 3D Worlds - Alibaba Gr Hldgs (NYSE:BABA)

Alibaba Group Holding Ltd. (NYSE:BABA) is actively unlocking value by scaling AI innovation, embedding it across commerce and cloud, and aligning with policy tailwinds to accelerate monetization.

AI Product Push Targets Monetization And Scale

Alibaba is expanding its AI stack with new models like "Happy Oyster," a world model designed to generate 3D environments, interactive videos, and game content, as it competes with Tencent Holdings Ltd. (OTC:TCEHY) and others.

The company developed the model through its newly formed Alibaba Token Hub unit and is initially offering it via limited early access, Bloomberg reported on Thursday.

The launch follows the debut of its "Happy Horse" video-generation model, which gained strong traction in China's AI landscape.

These efforts support Alibaba's broader goal of growing cloud and AI revenue fivefold to $100 billion over five years, alongside internal restructuring to prioritize commercialization.

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Taobao And Tmall Use AI To Drive Merchant Growth

At the China International Consumer Products Expo, Alibaba's commerce arm demonstrated how AI tools can improve both consumer discovery and merchant operations.

Song Tao, vice-president of Taobao and Tmall Group, said the platforms' scale makes them an ideal testing ground for AI applications, China Daily reported on Thursday.

He emphasized that the company is focusing on practical use cases, stating, "We believe useful AI must do two things at the same time: improve the consumer experience and create growth for merchants."

Alibaba is applying AI across storefronts and supply chains, including through Taobao Factory's "Spark" system, which helps manufacturers identify trends, optimize pricing, and generate marketing content.

Song added, "In the past, factories were good at making products but not necessarily good at selling them," highlighting how AI now bridges that gap by automating operations such as customer service, logistics, and after-sales support.

Ecosystem Expansion And Monetization Tools

Alibaba is also broadening access to AI through tools like its no-code platform "Meoo," developed by the Alibaba Token Hub unit. The platform allows users to build full-stack applications using natural language and supports multiple AI models, enabling non-technical users to create and deploy apps on Alibaba Cloud. The company said more than 10,000 internal employees are already using the tool, Pandaily reported on Thursday.

At the same time, Alibaba is refining its cloud monetization strategy, including pricing adjustments for Distributed Denial-of-Service (DDoS) protection services—such as raising Elastic 95 pricing from about $14 to $21 per Mbps per month—to standardize offerings and drive revenue, Pandaily reported on Wednesday.

Song Tao also pointed to structural advantages supporting Alibaba's AI push, noting that China's large consumer base, integrated supply chains, and openness to new technologies make AI applications both scalable and commercially viable.

BABA Price Action: Alibaba shares were up 3.53% at $137.97 during premarket trading on Thursday, according to Benzinga Pro data.

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