Alibaba Shift: A New Era for Open-Source AI Models
Alibaba plans to require large commercial users of its upcoming Qwen3.8-Max open-source AI model to share a portion of the revenue they generate from deploying it, according to an exclusive Reuters report published Thursday citing two people familiar with the company's plans.
The move, expected to take effect as early as next week, marks a strategic shift for the Chinese technology giant, which has until now allowed most customers to run its open-weight models in their own data centers without paying licensing fees.
Following Moonshot's Playbook
Alibaba's approach mirrors a model already tested by Chinese AI startup Moonshot, whose Kimi K3 license requires companies offering the model as a commercial service and generating more than $20 million in annual sales to negotiate a revenue-sharing agreement. According to one person familiar with Moonshot's arrangements, the company can require partners to share up to 30% of the revenue involved.
Alibaba also plans to ask for a revenue share, both sources told Reuters, though the exact rate remains undetermined as discussions are ongoing. Chinasoft International, a Chinese IT services provider, disclosed a revenue-sharing agreement with Moonshot in a regulatory filing last month without revealing the percentage.
A 'Freemium' Model for AI
The model weights will remain freely downloadable, meaning smaller developers and researchers retain access without cost. Only companies building large-scale commercial products on top of Qwen would need to negotiate terms.
"This is a tried and tested open-source 'freemium' model," said Paddy Srinivasan, CEO of DigitalOcean, one of several U.S. firms offering Kimi K3 and other Chinese models. He confirmed his company has a commercial agreement with Moonshot but declined to discuss specifics.
The strategy reflects a broader convergence among Chinese AI firms, which have released open-source models approaching the capabilities of closed systems from OpenAI, Anthropic, and Alphabet's Google, and are now searching for sustainable revenue models amid a fierce price
Broader Implications
The revenue-sharing deals are taking shape even as geopolitical tensions persist. The White House has accused Moonshot of stealing technology from Anthropic, claims Chinese officials have rejected as unfounded.
Meanwhile, open-source AI continues to expand in the United States. Thinking Machines Lab, founded by former OpenAI CTO Mira Murati, released its first open-source model last month. "I don't see a fundamental barrier" to powerful open-source U.S. models, said Lin Qiao, CEO of Fireworks AI.
Alibaba has not publicly confirmed the final license terms for Qwen3.8-Max or the revenue-sharing percentage it intends to seek.
