Alibaba Group Holding Limited (BABA) is making an aggressive play in artificial intelligence, and the strategy boils down to something refreshingly simple: give it away for free and see what happens.

The company officially launched its Qwen mobile app this week, positioning it as "the best personal AI assistant" with capabilities spanning chat, navigation, shopping, and professional productivity tools. Built on Alibaba Cloud's open-source Qwen model family, the app immediately saw heavy traffic in both Apple Inc. (AAPL) and Alphabet Inc. (GOOGL) app stores — so much traffic, in fact, that some users experienced delays, according to SCMP reporting on Monday.

Here's the interesting part: while competitors like OpenAI, Anthropic, ByteDance's Doubao, and Zhipu AI charge subscription fees, Alibaba is offering Qwen completely free. It's a classic platform play. The company isn't trying to make money directly from app subscriptions. Instead, it's betting on monetizing user activity through cloud services and using all that data to improve its AI models.

Alibaba isn't stopping with the consumer app. The company is also making its AI infrastructure more accessible to developers by cutting prices for its trillion-parameter Qwen3-Max model by roughly 50%, with additional discounts available for non-peak batch processing. The model has already proven itself competitive, topping a cryptocurrency investment challenge against leading U.S. and Chinese AI systems, SCMP reported on Friday.

The aggressive pricing strategy reflects the intense competition in China's AI market, but it also signals confidence. Alibaba stock has climbed over 81% year to date, largely driven by traction in its cloud unit and AI initiatives.

Singles' Day Shows Platform Power

Beyond AI, Alibaba's core e-commerce business continues to demonstrate resilience. During this year's Singles' Day shopping festival, more than 34,000 brands on Taobao and Tmall doubled their sales compared to last year. Thousands of brands achieved triple-digit growth, and some even saw five-fold increases. It's the strongest Singles' Day performance for Tmall in four years, and it's happening despite China's economic headwinds.

The results underscore something important: even in a sluggish economy, Alibaba's platforms remain the primary gateway to Chinese consumers. That network effect is valuable, and it's exactly the kind of moat the company is now trying to build in AI with its free Qwen app.

The strategy makes sense when you step back and look at the whole picture. Alibaba is using AI to enhance its e-commerce platform, offering free consumer tools to drive adoption, and pricing cloud services aggressively to capture developer mindshare. It's all interconnected.

BABA Price Action: Alibaba shares were up 2.55% at $157.70 at the time of publication on Thursday.