Chinese AI winners: Comparing Tencent and Alibaba

SelfRugger · 2026-03-29T01:17:32+00:00

The article compares Alibaba and Tencent's performance in the AI sector, highlighting Alibaba's recent success with its Qwen service while Tencent lags despite solid returns in ads and gaming. Analysts suggest the need for clearer indicators of AI profitability in both companies amidst regulatory challenges.

SelfRugger

2026-03-29 01:17:32

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Chinese AI winners: Comparing Tencent and Alibaba

Sam Boughedda

Sun, February 15, 2026 at 6:30 PM GMT+9 1 min read

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Investing.com – Bernstein said the China Internet sector has had “a ho-hum start to 2026,” but AI progress remains the key driver of relative performance.

Analyst Robin Zhu wrote in a note on Thursday that the introduction of agentic services in Alibaba’s Qwen has supported the company’s outperformance, while Tencent has lagged.

Bernstein said “a lot rides on the chatbot wars,” noting that leading platforms have turned to red packet handouts to stimulate adoption.

The firm argued that the promotions “feel supportive of our view that AI model capabilities are only part of the equation in consumer-facing AI.”

However, Zhu added that cash handouts are “a rather roundabout way to drive… search behaviour,” and said investors may soon look for clearer evidence of top-funnel disruption.

On Tencent, Bernstein stated that the company continues to deliver “solid AI ROI via its ads and gaming businesses,” even as its chatbot development work has faced scrutiny. The firm pointed to the recent Yuanbao Party issue as reflecting “dual-track AI development inside WeChat.”

Still, Bernstein argued Tencent’s shares offer a positive risk-reward profile as earnings compound and more AI-enabled services are introduced.

For Alibaba, Bernstein believes that AI optionality remains significant following the Qwen3-Max-Thinking launch. The firm wrote that while red packet incentives “feel more logical” in e-commerce, investors may eventually want clearer signs that agentic AI can translate into gains in gross merchandise value and marketing revenue.

Zhu added that the regulatory backdrop “remains higher than we’d like,” with recent investigations and policy rumours weighing on sentiment, though recent pullbacks may improve risk-reward.

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