Alibaba's "ChatGPT killer" has been downloaded 10 million times in its first week. How is the market reacting?

Chinese e-commerce giant Alibaba Group recorded 10 million downloads of its AI assistant Qwen, which competes with ChatGPT, in the week after its release. The publication of the statistics led to a sharp rise in the company's securities in Hong Kong and New York. Alibaba intends to turn the chatbot into a full-fledged super-application, adding tools for shopping on Taobao, food ordering, travel booking and other services. Analysts believe that Qwen's success will allow the market to reassess the value of the Chinese company, adding an "AI premium" to Alibaba's quotes.

Alibaba Group's Qwen chatbot has been downloaded by more than 10 million users within a week of its launch, the company announced on the morning of Nov. 24. The new free app, based on the most advanced version of Qwen's neural network, became available in China early last week as a mobile app and website. Alibaba plans to launch a global version of the chatbot at a later date.

Alibaba will gradually roll out AI features to support online shopping across its flagship Taobao marketplace and other platforms in the coming months, Bloomberg notes. As it transforms into a feature-rich super app, Qwen will integrate key services for life and work, including digital cards, food delivery, travel booking, office tools, e-commerce, and educational and medical services, according to the Hong Kong-based South China Morning Post, a newspaper owned by Alibaba Group.

Alibaba shares jumped 5.9% in morning trading in Hong Kong and ended the day up 4.7%. Alibaba shares were also up nearly 4% in pre-market trading in New York.

According to China Everbright Securities investment strategist Kenny Ng, Qwen's success could cause investors to revise Alibaba's valuation upward by adding an AI premium to the current share price. "Whether or not the company manages to utilize Qwen's app to develop its B2C business is an important factor that will influence its future valuation. The market sees this move as a key milestone in matching its valuation with that of OpenAI," Bloomberg quoted analyst China Everbright as saying.

"In line with the established practice of Chinese Internet companies, subsequent versions of the app will be released very quickly," Po Zhao, founder of Hello China Tech newsletter Po Zhao, told the South China Morning Post. Alibaba may also start offering Qwen to corporate users, he added.

According to FactSet, almost all analysts on Wall Street - 49 out of 52 - recommend Alibaba securities to buy with Buy or Overweight ratings. The average target price, calculated by MarketScreener, suggests the potential growth of quotations of the Chinese company by 29% on a yearly horizon.

Previously, Alibaba has not invested significant resources in the development of consumer applications like ChatGPT, focusing primarily on enterprise customers as part of its cloud business. The Chinese tech giant already had consumer-oriented AI products in its portfolio, including the Tongyi app (Qwen's predecessor) and AI assistants integrated into the Quark browser. But the launch of Qwen, a chatbot designed to compete with ByteDance's Doubao in the PRC and ChatGPT globally (ChatGPT is not available in China), is Alibaba's first attempt at large-scale expansion in the mass AI segment, signaling a shift in its strategy, Reuters noted.

This article was AI-translated and verified by a human editor