Alibaba

Alibaba has banned employees from using Anthropic’s AI tools due to security risks and allegations of intellectual property theft. This follows Anthropic’s accusation of Alibaba attempting an “AI distillation attack” and their terms prohibiting use by entities from “adversarial nations” like China. Alibaba now mandates the use of its own AI assistant, Qoder, amidst scrutiny of potential code loopholes in Claude and efforts by Anthropic to close access through proxies.

Anthropic accuses Alibaba of a massive “illicit distillation attack” to steal its AI capabilities, using millions of fraudulent interactions. This follows recent White House directives and Anthropic’s previous alerts about similar theft attempts. The accusation highlights growing concerns over AI intellectual property theft and national security in the global AI race.

Alibaba’s core profitability significantly declined by 84% in its March quarter due to substantial investments in AI semiconductors, data centers, and its Qwen AI models. While its cloud computing segment saw robust revenue growth, driven by AI, the highly competitive e-commerce landscape, particularly quick commerce, strained profitability. Despite this, quick commerce revenue surged, and overall China e-commerce revenue grew modestly. The company continues to integrate AI across its operations, aiming to enhance customer experience.

Alibaba has officially claimed development of HappyHorse-1.0, an AI video generation model that quickly topped global leaderboards. This move signifies a major step in Alibaba’s AI expansion. The model, initially unbranded, excelled in text-to-video and image-to-video generation, sparking widespread speculation. Alibaba’s stock saw an increase following the confirmation, underscoring the strategic importance of AI for the company amidst intense competition and challenges faced by other tech giants in the generative video space.

Alibaba has launched the XuanTie C950, a new CPU designed for AI agentic capabilities. Built on the RISC-V architecture, this chip aims to enhance AI inference in data centers. The development signifies Alibaba’s ongoing investment in in-house semiconductor innovation, driven by a need for supply chain resilience and cost reduction, particularly in light of US export restrictions on advanced chips. While a technological advancement, its immediate revenue impact may be limited by production capacity.

Alibaba significantly reduced its workforce by about 34% in 2025, cutting over 66,000 employees. This move aligns with divestitures of offline retail assets and a strong pivot towards artificial intelligence. The company aims to become a full-stack AI enterprise, targeting over $100 billion in annual revenue from cloud and AI within five years, despite recent profit and revenue declines.

Alibaba reported a 66% year-over-year net income decline in its fiscal third quarter, missing revenue estimates. The e-commerce giant is heavily investing in AI and cloud infrastructure, prioritizing long-term growth over immediate profits. CEO Eddie Wu highlighted strong AI-driven revenue growth in its Cloud Intelligence Group, with AI-related products seeing triple-digit growth for ten consecutive quarters. The company is committed to AI, planning significant investments and developing new AI models and agentic commerce capabilities.

Alibaba has launched Wukong, an enterprise AI agent tool managing multiple AI agents through a unified, secure interface. Wukong handles tasks like document editing, research, and meeting transcription, acting proactively beyond user prompts. Named after the Monkey King, it’s available as a desktop app and integrated with DingTalk, with future expansion to platforms like Slack and WeChat, and Alibaba’s e-commerce ecosystem. This launch coincides with Alibaba’s major restructuring and its focus on AI tokens.

Alibaba has launched its Qwen3.5 large language model series, featuring enhanced reasoning and native multimodal capabilities. The open-weight version offers flexibility for developers, while a hosted version is available on Alibaba Cloud. With 397 billion parameters and support for 201 languages, Qwen3.5 aims to compete with global AI leaders and addresses the growing trend of AI agents capable of autonomous task execution, amidst intense domestic competition from companies like ByteDance and Zhipu AI.

Chinese tech giants like Alibaba, ByteDance, and Kuaishou are rapidly advancing AI, challenging Western dominance. Alibaba’s RynnBrain enhances robot capabilities, while ByteDance’s Seedance 2.0 and Kuaishou’s Kling 3.0 push the boundaries of AI video generation. Other firms like Zhipu AI and MiniMax are also releasing competitive AI models, signaling China’s growing prowess in the global AI landscape.