ARK Invest Snaps Up $26M in Alibaba (BABA) as Tech Giant Revs AI Rival to ChatGPT

Alibaba makes its move in the AI arms race—ARK just placed a $26 million bet on it.

The e-commerce titan fired the latest salvo in the generative AI wars today, relaunching its artificial intelligence platform to directly challenge OpenAI’s ChatGPT. Cathie Wood’s ARK Investment Management responded by gobbling up $26 million worth of BABA shares—because nothing says 'conviction play' like chasing the 37th tech giant to rebrand last year’s large language model.

Bulls see Alibaba’s cloud infrastructure giving it an edge in the AI sprint. Bears whisper about regulatory overhangs and the fact that 'AI-powered' has replaced 'blockchain-enabled' as the mandatory buzzword for boosting lagging stock prices.

One thing’s certain: When hedge funds and hyperscalers collide, retail investors should probably duck.

TLDR

• Alibaba is relaunching its main mobile AI app, renaming “Tongyi” to “Qwen” to align with its AI model brand and compete with ChatGPT
• The updated app will feature agent-AI shopping tools integrated with Taobao and other e-commerce platforms to leverage Alibaba’s retail ecosystem
• Cathie Wood’s ARK Invest purchased $26.2 million in Alibaba shares across three ETFs on November 11, while the stock declined 3.1%
• Alibaba trails competitors Tencent and ByteDance in AI app user numbers but plans to stay free initially to build user base before monetization
• ARK simultaneously exited its Reddit position by selling $8.2 million worth of shares and invested an additional $1.9 million in Baidu

Alibaba is making big moves in artificial intelligence. The company plans to relaunch its main mobile AI app in the coming months with a new name and upgraded features.

The current “Tongyi” app will become “Qwen” on both iOS and Android. Qwen is already the name of Alibaba’s popular AI model. The rebrand aims to create a unified identity similar to ChatGPT’s approach.

Alibaba Group Holding Limited, BABA

The updated app will include agent-AI features designed for shopping. These tools will connect directly with Taobao and Alibaba’s other e-commerce platforms. The rollout will happen in stages over several months.

Alibaba currently lags behind its rivals in AI app usage. Tencent and ByteDance both attract more users to their AI applications. The company hopes its shopping integration will help close this gap.

The strategy makes sense given Alibaba’s strength in e-commerce. By linking AI tools to shopping platforms, the app could become more useful for daily tasks. This practical approach may draw users away from competitors.

Building User Base Before Revenue

The Qwen app will remain free for now. Alibaba wants to grow its user base first before introducing paid features. This represents a shift in China’s AI market, where most revenue currently comes from business clients rather than consumers.

CEO Eddie Wu announced in September that AI investment WOULD increase. The company described AI as a core focus going forward. Alibaba already operates several AI apps, including “Qwen Chat,” but wants to consolidate under one brand.

Earlier this year, Alibaba upgraded its Quark search app with AI assistant features. Quark will continue operating, but Qwen is expected to become the primary consumer AI product. The company’s most recent quarterly results showed strong growth in AI-related products.

Cloud services also performed better than expected. These results helped improve investor sentiment toward the stock. The new Qwen app could build on this momentum.

ARK Invest Loads Up on Shares

While Alibaba announced its AI plans, Cathie Wood’s ARK Invest made a major purchase. The firm bought 157,731 Alibaba shares worth $26.2 million on November 11. The purchase happened as BABA stock dropped 3.1% that day.

ARK spread the investment across three funds. ARK Innovation ETF purchased 117,335 shares. ARK Next Generation Fintech ETF bought 33,415 shares. ARK Fintech Innovation ETF added 6,981 shares.

ARK also increased its Chinese tech exposure through Baidu. The funds acquired 14,531 Baidu shares for $1.9 million. Combined, ARK invested approximately $27 million in Chinese technology companies that day.

On the same date, ARK sold its Reddit position. The firm divested 40,000 Reddit shares valued at $8.2 million. Reddit stock gained nearly 2% during the trading session. The timing suggests profit-taking after price gains.

Wood’s decision to buy Alibaba during a price decline indicates confidence in the stock’s prospects. The large purchase size reflects conviction in the company’s direction. ARK has been known for taking concentrated positions in growth stocks.

The key question is whether users will adopt the new Qwen app quickly. Alibaba also needs to prove it can convert user interest into actual revenue. The company will report Q2 FY26 results soon, which may include updates on user growth and AI strategy.

The average price target of $165.61 represents 20.76% upside from current levels. The combination of AI innovation and institutional buying could provide support for shares going forward.