Alibaba Group Holding Ltd. launched a new AI model that can be used to develop games and generate videos simulating the real world, expanding its suite of products to challenge Tencent Holdings Ltd. as it looks to monetize the technology.
The Chinese e-commerce firm on Thursday unveiled Happy Oyster, a so-called world model that can create 3D environments and interactive videos. It can be used to produce films, video content and games, the company said.
Alibaba has set a bold target of quintupling annual cloud and AI revenue to $100 billion in five years. In recent weeks, the company has aggressively launched a series of new AI models and revamped its organization in a bid to refocus efforts on making money from the technology and recoup some of its investment. Alibaba’s stock rose as much as 5.8% Thursday, outperforming a broader market rally.
The new model unveiled Thursday was developed by the Alibaba Token Hub, a newly created business unit, the company said in a post on X. The tool is so far only available on a limited early-access basis, Alibaba said.
Last week, the company revealed it created the Happy Horse video-generation model that sent ripples across China’s AI industry, claiming ownership of a platform that topped global rankings on debut.
World models are aimed at recreating real-world physics and spatial properties, setting the foundation for 3D content. They are also used to train robots and enhance environmental recognition in autonomous vehicles. Tencent has its own Hunyuan3D series of open-source world models, while Alphabet Inc.’s Google operates the Genie model.
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Published on April 16, 2026