Alibaba's AI Momentum Builds As Qwen Coder Gains Market Share
News Summary
An IDC report indicates that China's public cloud AI services market grew 55% to 19.6 billion yuan in 2024, with Baidu and Alibaba each holding approximately 25% market share, followed by Tencent and Huawei. AI demand has significantly evolved from traditional applications to large language models and then to agentic forms, driving robust growth in AI cloud services. Within segments, computer vision remains the largest, while machine learning is the fastest-growing, spearheaded by Huawei and Alibaba. Alibaba's stock has gained over 43% year-to-date in 2025, significantly outperforming Baidu's 7% returns. Its AI coding model, Qwen 3 Coder, has gained global traction, capturing over 20% usage share on the OpenRouter marketplace by mid-August, ranking second only to Anthropic's Claude Sonnet 4. To boost adoption and compete with rival AI coding tools from ByteDance, Baidu, and Tencent, Alibaba has offered free access to its Qwen 3 Coder.
Background
According to IDC, China's public cloud AI services market grew 55% to 19.6 billion yuan ($2.7 billion) in 2024, with Baidu and Alibaba each capturing about 25% market share, followed by Tencent and Huawei. AI demand has evolved from traditional applications (e.g., OCR, quality inspection, surveillance) before 2022, to large language models (LLMs) in 2023, and then to agentic forms enabling autonomous, task-oriented interactions in 2024, accelerating demand for AI cloud services. Within segments, computer vision remained the largest, while machine learning was the fastest-growing, led by Huawei and Alibaba. The article also notes that Alibaba's stock gained over 43% year-to-date in 2025, significantly outperforming Baidu's 7% returns, reflecting positive market sentiment towards its AI business development.
In-Depth AI Insights
What does Alibaba's significant progress in the AI coding market signify for its cloud computing business and overall strategy? - Alibaba's Qwen 3 Coder rapidly gained market share after its launch, particularly on global AI platforms like OpenRouter, demonstrating the effectiveness of its technology and market strategy (free access). - This progress not only enhances Alibaba's brand and influence in the AI sector but, more importantly, it will attract more developers and enterprise users to Alibaba Cloud, creating a powerful ecosystem effect that drives revenue growth and market share for its core cloud computing services. - Given the critical role of AI coding in improving software development efficiency, Alibaba is poised to deepen its collaboration with enterprise clients through this tool, further solidifying its leadership in the enterprise-grade AI solutions market. With increasing competition in China's AI cloud services market, how can Alibaba maintain its leading position and mitigate potential risks? - China's AI cloud services market is growing significantly, but competition is fierce, with giants like Baidu, Tencent, Huawei, and ByteDance heavily investing. Alibaba needs continuous technological innovation and ecosystem building to maintain its edge, for instance, by constantly optimizing its Qwen series models and exploring more commercialization paths. - While a free access strategy helps quickly acquire users, the key long-term challenge is converting these users into paying customers or monetizing through value-added services. Furthermore, facing geopolitical risks and technology export restrictions, Alibaba must ensure the self-sufficiency of its AI tech stack to mitigate the impact of external uncertainties on business development. What are the profound implications of the proliferation of AI coding tools for the future revenue structures and talent strategies of Chinese tech giants? - The widespread adoption of AI coding tools will transform traditional software development models, improving efficiency and reducing costs. For tech giants, this means their cloud services and AI solutions will become more attractive, thereby increasing the revenue contribution from these high-margin businesses. - In the long run, the broad application of AI coding tools may lead to reduced demand for junior programmers but will significantly increase the demand for senior AI engineers and multidisciplinary talents capable of designing complex systems using AI tools. This necessitates that tech giants adjust their talent development and recruitment strategies to adapt to new industry trends and ensure their sustained competitiveness in the AI era.