Alibaba’s (BABA) open-weight models have accumulated more than 3 billion global downloads in the past six months, eclipsing Meta Platforms Inc., Alphabet Inc. and domestic peers to become the world’s No. 1 artificial-intelligence model.

Qwen, Alibaba’s family of AI models, has open-sourced more than 460 models and its ecosystem has spawned 300,000-plus derivatives, the Chinese technology company said in an emailed statement. Google, part of Alphabet, had 418 million downloads while Meta stood at 227 million in 2026, according to popular open-source AI hub Hugging Face Inc., which published a state of open models report on Aug. 14.

Open models can be downloaded, customized and used as building blocks for new AI products, making adoption a gauge of which technologies developers are choosing to build on. That has made download and derivative-model figures one measure of influence in the US-China AI race, as Chinese developers including Alibaba push capable models that are relatively cheap and easy to adapt. Qwen’s rise suggests that strategy is gaining traction beyond China.

Qwen along with Moonshot AI Inc, DeepSeek and Chinese AI model builders are replicating frontier performance, seeking to bridge the gap with closed models in U.S., such as OpenAI and Anthropic. Export controls on chips and AI systems, such as the brief ban on overseas access to Anthropic’s Fable 5 model this summer, don’t appear to be putting the brakes on Chinese competitors.

Alibaba’s download data for Qwen makes it “one of the largest foundations of the open AI ecosystem,” the Hugging Face report said. The Hangzhou-based cloud, e-commerce and AI tech company is making gains over local rivals DeepSeek, Moonshot Kimi and MiniMax as well as US models.

“Qwen has become part of the default workflow for developers deciding what models to fine-tune and deploy,” the report said.

On Seeking Alpha A.J. Button summarizes Alibaba’s AI position this way:

“Alibaba is rapidly emerging as China’s central AI hub, boasting a vertically integrated, full-stack AI ecosystem.
Alibaba Cloud leads China’s cloud market with a 40% share, integrating proprietary chips and AI models. This “full stack” capability gives Alibaba a competitive edge. The company owns sizable stakes in Moonshot AI, whose Kimi K3 model recently made headlines for frontier capabilities, and CXMT, which rallied 400% after going public.
Despite rapid AI-driven expansion, Alibaba trades at just 19x earnings and 1.91x sales, reflecting a significant valuation discount to global tech peers.”

I think that AI is a truly revolutionary technology, but I’ve got string reservations about the high valuations and the potential future profitability of U.S. frontier closed model AI companies such as OpenAI and Anthropic. And I really don’t like the circular, debt-funded financial ecosystem that has turned the U.S. sector into something that looks, on some days, like a Ponzi scheme.

I’m buying the U.S. -traded ADRs on Monday, August 17. A buy of Alibaba on my 12-18 month Jubak Picks and my long-term 50 Stocks portfolios is an attempt to invest in this technology while avoiding some of the risks.

Morningstar calculates a $241 fair value price for the ADRs, which closed at $123.81 on Friday, August 14.

It’s always important to ask why a stock that seems undervalued is trading at a bargain price. In Alibaba’s case it comes down to general worries about the health of consumer spending in China (not at death’s door but serious wheezy can be heard) and specific concern about erosion in the company’s market share in China’s e-commerce sector. Alibaba is losing market share to PDD and Douyin in the China e-commerce business. But I think the erosion is priced into the stock and Alibaba’s gross merchandise volume to China’s online retail sales of goods ratio was 62% in the year ended March 2023 at Alibaba. (Down from 72% in the year-earlier period.)

Against that problem, weigh the company’s emergence as the central “hub” of China’s AI ecosystem. The company owns a rapidly growing cloud business; a leading series of open source AI models; and a semiconductor subsidiary that is now selling chips to other companies. Alibaba is, in my opinion, the only vertically integrated company in China’s AI supply chain. Alibaba has the highest market share in Chinese cloud services, and has the most data centers of all the players in the Asia Pacific region.

BABA stock, despite some recent gains, is down year-to-date. It is down from an all-time high set all the way back in 2020. It is only up 30% from its 2014 IPO–-an IPO that occurred when Alibaba was doing just $4.2 billion per year in revenue.

Photo by zhang hui on Unsplash