**Alibaba Group (BABA) has halted its AI companion features on the Qwen platform as new Chinese regulations come into effect.** The shutdown began on July 10 and stopped all user-created and humanlike agents five days later, aligning with the July 15 rollout of China’s first regulatory framework on simulating human personality in AI. This comprehensive measure, enacted by the Cyberspace Administration of China and other agencies, addresses concerns such as data privacy and psychological harm.
**In the same week, Alibaba’s stock surged 12.2% in Hong Kong, reaching HK$107.5, its largest single-session gain since September 2025.** This increase followed the company’s pre-earnings briefing, which indicated a significant narrowing of losses in its instant-commerce business during the June quarter. Overall revenues also rose to 243.38 billion yuan ($34.5 billion), while Alibaba Cloud’s revenue reached 41.63 billion yuan ($6.04 billion), marking a 38% year-over-year increase.
**Despite regulatory setbacks in China, Alibaba’s AI spend aligns with similar investments by U.S. peers Microsoft and Amazon.** Both companies have experienced margin pressures from AI infrastructure investments but are not subject to the same regulatory restrictions affecting Alibaba. So far this year, BABA shares have fallen 33%, significantly underperforming the broader Internet–Commerce industry.
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