Alibaba Group Holding (BABA.N): Thoughts on Qwen 3.8 Max Preview and Implications from Kimi K3 Release

研报英文原文证据摘录

Alibaba Group Holding (BABA.N): Thoughts on Qwen 3.8 Max Preview and Implications from Kimi K3 Release

Alibaba Group Holding (BABA.N)

20 July 2026 Citi Research

China's AI sector: an accelerating race where companies continuously leapfrog one another with more advanced models. This

rapid cycle of innovation escalates the competitive intensity across the industry. We believe the industry's future will likely be

shaped not by a single breakthrough, but by a sustained marathon requiring immense resources and strategic positioning. We

believe the long-term success of the industry will depend on strong capital funding to support model training and innovation,

the ability to attract and retain top-tier AI talents, and an established and loyal customer base that is essential to generating

recurring revenues and providing feedback loop. In our view, the prevalence of open-weight models in China is fostering a

"model-agnostic" approach among enterprises and professionals. Rather than committing to a single AI provider, enterprises

and users increasingly adopt a multi-model strategy, selecting the best-performing model for each specific task. This trend

diminishes the defensibility of any single model and shifts the competitive focus toward the platforms and infrastructure that

can seamlessly integrate and manage them, in our view. Hence, we believe companies possessing full-stack capabilities,

spanning from chips to cloud infrastructure, models and applications are to be better positioned to lead and sustain their

advantage. We continue to believe the market may be underappreciating the full-stack capabilities of Alibaba and Baidu.

Similarly, Tencent's recent traction with WorkBuddy and the upcoming agentic AI in WeChat, which demonstrate the value of