During the Spring Festival of 2026, Chinese tech giants launched the first user acquisition battle driven by subsidies for AI applications. Alibaba, ByteDance, Tencent, and Baidu collectively invested over 8 billion yuan to seize the &#34;AI super entrance.&#34;
Morgan Stanley's latest report points out that in the short term, daily active users (DAU) and weekly active users (WAU) have both experienced explosive growth, but differentiation has already emerged in three core dimensions: traffic scale, user engagement, and post-holiday retention rates.
The report believes that ByteDance's Doubao, with its large traffic base, has demonstrated significant engagement resilience, &#34;winning&#34; the short-term traffic battle. Meanwhile, Alibaba's Tongyi Qianwen has generated approximately 200 million orders through an AI-driven physical business ecosystem, with superior user retention and monetization potential.
Some platforms have seen a rapid decline in traffic and a significant drop in engagement after the subsidy tide recedes. Morgan Stanley warns that simply &#34;burning money for traffic&#34; cannot build a moat; long-term success depends on product practicality, ecosystem integration, and the ability to create real value.
<h2>An Unprecedented AI Subsidy War: Total Expenditure Exceeds 8 Billion Yuan</h2>
Morgan Stanley estimates that various platforms have collectively spent over 8 billion yuan on promotions through cash red envelopes, order subsidies, ecosystem traffic introduction, and media exposure.
Alibaba's Tongyi Qianwen launched a &#34;3 billion yuan Spring Festival hospitality plan,&#34; offering 25 yuan no-threshold coupons covering diverse scenarios such as takeout, instant shopping, movie tickets, flights, and hotels, and has repeatedly extended the coupon validity until March 3. Morgan Stanley estimates that the order subsidy alone amounts to 5 billion yuan (approximately 200 million orders × 25 yuan), and the actual expenditure exceeds 5 billion yuan when combined with brand marketing expenses.
ByteDance's Doubao deeply tied to CCTV's Spring Festival Gala, distributing cash red envelopes of up to 8,888 yuan and setting up 100,000 high-value tech prizes, including categories like robots and drones. The estimated value of the prizes alone has reached about 1.5 billion yuan, with total expenditures far exceeding this scale.
Tencent's Yuanbao distributed 1 billion yuan in cash red envelopes from February 1 to 23 and provided additional lottery opportunities through creative tasks like AI image generation. Baidu Wenxin also invested 500 million yuan in cash red envelopes, with the activity period running from January 26 to March 12, while becoming the chief AI partner of Beijing Satellite TV's Spring Festival Gala to enhance brand exposure.
<h2>Traffic Expansion: Doubao &gt; Qianwen &gt; Yuanbao</h2>
The report states that during the Spring Festival, all three major AI platforms achieved significant increases in DAU, but the scale and driving nodes showed differentiation.
ByteDance's Doubao started with 84 million DAU before the event and surged to a peak of 144.5 million on the night of the CCTV Spring Festival Gala, with a net increase of over 60 million in a single day. During the gala, it processed over 1.9 billion AI queries, with a peak total parameter model (TPM) reaching 63.3 billion, demonstrating its ability to handle traffic while withstanding technical pressure.
Alibaba's Tongyi Qianwen started from a baseline of about 17 million DAU before the festival and surged to a peak of 73.5 million the day after the event started on February 7, with a net increase of 56.5 million. More notably, its monetization conversion capability is worth attention. During the Spring Festival, approximately 200 million orders were generated through Qwen, covering over 100 million beverage orders, including 55.2 million cups of milk tea, 35.2 million cups of fruit tea, and 11.4 million cups of coffee
Air ticket, hotel, and scenic spot ticket orders increased by 540%, 161%, and 2429% month-on-month, respectively, showcasing the potential for deep collaboration between AI and the physical business ecosystem.
Tencent's Yuanbao started with approximately 7 million DAU in January, climbing to a peak of 40.5 million, with a net increase of 33.5 million. As of February 17, the official announcement stated that the peak DAU had surpassed 50 million, with MAU reaching 114 million. Although it started later, the catching-up momentum is evident.
In contrast, Baidu Wenxin has shown weak performance. Despite ongoing promotions, its WAU and DAU have continued to decline month-on-month this year, with a peak DAU of only 826,000, clearly lagging behind the other three major platforms. <img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9d722f1f-a5e2-4961-8e87-6a38db9b0f31.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/9d722f1f-a5e2-4961-8e87-6a38db9b0f31.png"/>
<h2>User Stickiness: Doubao &gt; Yuanbao &gt; Qianwen</h2>
Morgan Stanley pointed out that while traffic surged, the average usage time per user generally faced pressure, but the decline varied significantly across platforms.
Tongyi Qianwen was hit the hardest. During the event, the average daily usage time per user dropped from 6.3 minutes before the event to a low of 3 minutes, a decline of 51%. This data reflects that its user behavior is dominated by &#34;coupon transactions&#34; rather than genuine AI functionality usage—behind the traffic frenzy, the foundation for user retention remains weak.
Yuanbao also faces participation challenges. The average daily usage time per user has declined by about 32% compared to January levels, with a three-week average of about 6.5 minutes in February, indicating that the engagement of new users is significantly low, and traffic expansion has not translated into deep usage.
In contrast, Doubao has shown the most stability. The average daily usage time dropped to 8.7 minutes during the week of February 16 to 22, only down 15% from the pre-event average of 10.2 minutes, demonstrating the strongest user engagement resilience among the three major platforms. This means Doubao not only &#34;won&#34; traffic but also managed to retain user attention to some extent.
<img src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/17b04293-90c0-4ee9-93c3-c55d5d4cbdda.png?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" original-src="https://imageproxy.pbkrs.com/https://wpimg-wscn.awtmt.com/17b04293-90c0-4ee9-93c3-c55d5d4cbdda.png"/>
<h2>Retention Quality: The True Test Comes After the Event Surge</h2>
The report noted that after the peak of the event on February 16, all three major platforms experienced a decline in traffic, but the extent of the decline and retention quality differed significantly.
Tongyi Qianwen's DAU remained significantly higher than pre-event levels after the event, but Morgan Stanley pointed out that this resilience may be partly due to the coupon validity being extended multiple times until March 3, rather than genuine user retention. In other words, the high traffic levels are sustained by subsidy extensions &#34;prolonging life.&#34;
Doubao saw a noticeable decline from its peak, but the user base structurally stabilized above the pre-event baseline, indicating that the Spring Festival marketing indeed brought some genuine incremental user retention. Even as the excitement wanes, the user scale has still reached a new level
The decline of Yuanbao is the most severe, with DAU almost giving back all activity increments, falling back to pre-activity levels. This trend clearly indicates that the attractiveness of subsidies far exceeds the retention capability of the product itself—when the red envelopes stop being distributed, users leave as well.
<h2>The Battle of Super Entry Points: Victory Depends on Product Rather than Subsidies</h2>
This Spring Festival AI battle reveals a core proposition: there is an essential difference between short-term traffic purchases and long-term user value. Morgan Stanley's analytical framework clearly shows that the rankings of traffic scale, user engagement, and post-activity retention are not consistent—Doubao leads in both traffic and engagement, Tongyi Qianwen excels in retention data but is disturbed by coupon delays, while Yuanbao quickly declines after the subsidy tide recedes.
For investors, the truly important core question is: After subsidies stop, which platform can retain users through product strength, seamless integration of ecosystems, and real value creation that transcends financial incentives. One-time cash burning can buy DAU, but it cannot buy user habits. The competition for China's AI super entry points in 2026 has just begun

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Morgan Stanley's review of the Spring Festival AI battle shows that the four major platforms spent over 8 billion yuan to seize the "AI super entrance." ByteDance's Doubao topped the traffic rankings thanks to its Spring Festival marketing, "winning" the short-term traffic battle. Alibaba's Tongyi Qianwen holds an advantage in retention metrics, but its post-holiday DAU running at a high level is mainly due to multiple extensions of coupons until March 3, and the actual retention still needs to be verified. The report warns that burning money cannot buy a moat; the outcome depends on product strength and ecosystem integration

- During the 2026 Spring Festival, Chinese tech giants engaged in an unprecedented AI user acquisition war, with over 8 billion RMB spent on subsidies.  
- Morgan Stanley reported significant growth in daily active users, but noted disparities in user engagement and retention following the subsidy period.  
- The analysis indicates that long-term success will depend more on product utility and real value creation rather than on short-term subsidy-driven user acquisition strategies.

Spring Festival AI Battle Review: Doubao "Wins" Traffic, Qianwen "Occupies" Retention