Lunar New Year Showdown: China’s Tech Titans Turn Traditional Holidays into AI Battlegrounds

Alibaba recently announced a massive 3 billion yuan ($431 million) marketing campaign aimed at boosting the user base of its Qwen AI application during the upcoming Lunar New Year. This aggressive financial commitment significantly intensifies the ongoing rivalry among China’s premier technology giants. By tripling the promotional budgets recently pledged by competitors like Tencent and Baidu, Alibaba is positioning itself at the forefront of the nation's artificial intelligence sector. Scheduled to begin on February 6, the initiative will offer various incentives related to dining, entertainment, and leisure, featuring the continuous distribution of "large red envelopes," a traditional festive gesture modernized for the digital age.

The timing of this campaign is strategic, as the Lunar New Year serves as a premier marketing window when millions of citizens travel and interact with family. This period has historically been used by tech firms to secure market dominance; a famous example occurred in 2015 when Tencent’s digital red envelope campaign allowed WeChat Pay to challenge the then-dominant Alipay. This year’s holiday is particularly significant as it spans nine days starting February 15, providing an extended timeframe for user acquisition.

While Tencent and Baidu have allocated 1 billion yuan and 500 million yuan respectively for their own AI chatbot promotions, Alibaba’s larger investment underscores the high stakes in the domestic AI race. The competitive landscape has become increasingly crowded and fast-paced since the debut of DeepSeek’s R1 model last year, which disrupted global markets and forced Chinese firms to accelerate their development cycles. In response, Tencent has already initiated its campaign for the Yuanbao chatbot, requiring users to update their software to access cash rewards that can be transferred directly to digital wallets.

Alibaba has not yet clarified whether its rewards will consist of direct cash transfers or promotional vouchers for its ecosystem, such as the Taobao e-commerce platform. Nevertheless, the industry-wide push is clear, as multiple firms are timing major updates to coincide with the festivities. For instance, reports suggest that DeepSeek is preparing to unveil its next-generation V4 model, which is expected to feature advanced coding capabilities, in the middle of February. As these tech titans pour billions into festive promotions and technological upgrades, the Lunar New Year has transitioned from a traditional holiday into a critical battleground for artificial intelligence supremacy in China.