Alibaba has secured another major AI contract

Author | Liu Baodan

Editor | Zhou Zhiyu

AI is accelerating its penetration into various industries, and model vendors are competing for the application market. As one of the earliest technology giants to lay out AI in China, Alibaba has achieved significant success.

On March 26, Wall Street Insight learned that BMW and Alibaba have reached a comprehensive AI cooperation agreement, with Alibaba's Tongyi large model being applied to BMW's new generation series models in the Chinese market. According to insiders at BMW, this model is set to go into mass production in 2026 and will be the first to empower the new BMW Intelligent Personal Assistant with AI large language models, bringing AI agents into the cabin.

This marks another major AI deal for Alibaba following Apple, indicating a landmark progress for Alibaba in the automotive industry.

In 2025, AI large model vendors will face a brutal elimination round. Li Kaifu, CEO of Zero One Technology, predicts that the Chinese large model field will eventually converge to three companies: DeepSeek, Alibaba, and ByteDance. However, for Alibaba, being chosen by Apple and BMW is just the beginning; the real challenge lies in whether Alibaba's AI can withstand the test of the market and users.

This will be a competition with real stakes, and only the winners can earn the ticket to advance.

Partnering with BMW

One is the leader in AI in China, and the other is a world-renowned automobile manufacturer; Alibaba and BMW have come together in the AI application market.

According to informed sources, both parties attach great importance to this cooperation and will conduct joint research and development in cutting-edge fields such as AI large language models and intelligent voice interaction, providing forward-looking solutions that closely meet the needs of Chinese users.

In terms of intelligent experience, the BMW Intelligent Personal Assistant will integrate AI Agent for the first time, with core capabilities including human-like communication, multi-agent collaboration, and open ecosystem integration, enabling precise intent capture, complex command parsing, fuzzy semantic understanding, and rigorous logical reasoning, making the interaction experience more natural and smooth.

Overall, BMW's use of AI technology to enhance user experience will focus on three dimensions: driving pleasure, natural human-machine interaction, and immersive entertainment experience, ultimately achieving a multimodal natural interaction experience that encompasses voice and vision.

Behind this, the new BMW Intelligent Personal Assistant is based on the Tongyi large model and Zebra Yuan Shen AI, using an AI engine co-developed by BMW and Alibaba, which is planned to be equipped in the BMW new generation series models produced in China, expected to be delivered to the Chinese market in 2026.

The aforementioned sources further revealed that the intelligent cockpit and smart mobility interaction scenarios supported by the AI engine will make their debut at the Shanghai Auto Show in April this year.

Eddie Wu, CEO of Alibaba Group, stated: "Alibaba Group and BMW Group are deepening strategic cooperation, leveraging Alibaba's Tongyi large model to help BMW create a smarter AI experience. This is an innovative exploration to promote the integration of AI with advanced manufacturing."

So far, Alibaba AI has served numerous automotive companies, including state-owned enterprises such as FAW, SAIC, and Changan, as well as new forces like BYD, XPeng, Nio, Xiaomi, and ZEEKR, especially in the intelligent cockpits of XPeng, ZEEKR, Leapmotor, and IM Motors, which have already integrated the Tongyi series models.

Wall Street Insight has learned that beyond the automotive industry, Alibaba's Tongyi large model has served over 1,000 government and enterprise clients, commercial banks, internet companies, mobile phone brands, leading home appliance manufacturers, universities, and research institutions, and is still accelerating its penetration into various industries

Winning with Models

Among the many model manufacturers in China, BMW's choice of Alibaba's Tongyi Qianwen is based on a comprehensive consideration.

On March 25, BMW Group announced the launch of a 360-degree full-chain AI strategy in China, which is based on empowering digital production operations and centered on enhancing the intelligent user experience across all scenarios. AI has become a key driving force for BMW in creating intelligent and safe mobility solutions.

Behind the 360-degree full-chain AI strategy, BMW aims to shape the company's long-term competitive advantage in the era of artificial intelligence and gain more leverage in the fierce competition of the automotive market, with Alibaba's AI capabilities being a crucial part of this.

As one of the earliest technology companies to lay out large models, Alibaba released its first large language model, Tongyi Qianwen, in April 2023 and has continued to open source it. On January 29, Alibaba's ultra-large MoE model Qwen2.5-Max officially went live, demonstrating performance on par with or even surpassing that of DeepSeek V3 and GPT-4 in multiple authoritative benchmark tests.

For BMW, Alibaba's data capabilities are also very attractive. As an e-commerce giant, Alibaba possesses a vast amount of user shopping and payment data, which is highly valuable. To provide AI services that closely meet the needs of Chinese users, Alibaba undoubtedly offers the optimal solution, as it understands both technology and users.

Alibaba also has advantages in AI ecology and service capabilities. For BMW, choosing a stable internet giant ensures the stability of the supply chain.

The Tongyi Qianwen Qwen large model has become the largest open-source model family globally. As of now, the number of derivative models of Qwen in domestic and international AI open-source communities has exceeded 100,000, surpassing the American Llama series models and becoming the largest open-source model family in the world.

In addition, more than 290,000 enterprises and developers are using the Tongyi Qianwen API on Alibaba Cloud's Bailian platform.

Since 2015, Alibaba has been a long-term partner of BMW. Over the past decade, the two sides have collaborated in the digital field, extending from e-commerce, cloud computing, intelligent connectivity, and in-car navigation to smart cockpits, voice interaction, and AI large models.

Pressure Remains

It has been more than two years since ChatGPT gained widespread attention, and this AI competition has begun to enter the application phase, which means that model manufacturers will face very stringent market tests.

On March 20, Li Kaifu, CEO of Zero One Technology and Chairman of Innovation Works, stated that the pre-training of large models in both China and the United States is gradually becoming oligopolistic, and the degree of oligopoly is continuously increasing. He predicts that the Chinese large model field will eventually converge to three companies: DeepSeek, Alibaba, and ByteDance.

Alibaba's advantage lies in its full-stack system that encompasses models, AI infrastructure, chips, cloud computing, and open-source communities. Moreover, both its model capabilities and cloud computing services are in the top tier domestically, which is the result of Alibaba's years of technological accumulation.

However, challenges are also evident. At this stage, the AI market is still driven by model performance rather than products, which means that Alibaba must continue to iterate on its technology. Currently, the only model product that has truly changed the fundamentals of AI is DeepSeek, which comes from a startup outside of Alibaba's ecosystemFrom the perspective of market potential and innovation capability, Alibaba faces significant pressure. Kai-Fu Lee believes that DeepSeek is currently the most vigorous in China, while xAI is developing the fastest in the United States, but OpenAI, Anthropic, and Google will also produce impressive research and development work.

In addition, although Alibaba has the capability and ecological advantages of the AI industry chain and excels in B-end business, it lacks experience in creating C-end social products. In 2013, Alibaba attempted to create a social application called "Laiwang" to compete with WeChat, but ultimately failed, and Alibaba subsequently shifted its focus to DingTalk for the enterprise market.

Alibaba has already taken a significant step in the AI application market, and its partnership with BMW is just the beginning. Whether consumers are ultimately willing to pay for the intelligent experience brought by AI will still have to endure the harsh test of the market.

This is not only a challenge faced by Alibaba AI but also an inevitable path for all AI companies toward market entry and commercialization