(Yicai) Feb. 6 -- Alibaba Group Holdings said it is “urgently adding resources” to stabilize its Qwen app after a surge of users caused localized outages, as the Chinese internet giant rolls out CNY3 billion (USD420 million) in Lunar New Year giveaways to promote the artificial intelligence assistant.

“We're urgently adding resources to ensure the system’s smooth operation,” an official at the Hangzhou-based company told Yicai.

When Qwen’s subsidy campaign launched today, heavy participation caused users in several parts of China to report being temporarily unable to access the event page. According to the page, the campaign’s first wave runs through Feb. 12.

Users who download the Qwen app will receive a CNY25 (USD3.60) coupon for milk tea or special Chinese New Year buys on Taobao Flash Sale, Alibaba’s instant retail platform. It gave away over one million coupons for milk tea in less than three hours of the promotion starting, Alibaba told Yicai.

Users also earn rewards for every friend they invite to download the app, with the friends receiving rewards as well. Users who successfully invite three friends in a single day are entered into a lucky draw with prizes worth as much as CNY10,000 (USD1,440).

The campaign’s second wave will start on Feb. 13, with each user having the chance to win up to CNY2,888 (USD415) in cash red envelopes. Red envelopes, or hongbao in Chinese, are a traditional way of gifting cash in China, particularly during major holidays.

Alibaba founder Jack Ma, who stepped down as chairman in 2019, met with the project team behind Qwen on Feb. 4, heightening the tension around the battle for consumer-AI entry points that the country’s tech champions have been preparing.

This year's Chinese New Year has become a high-stakes battlefield for China’s AI apps. TikTok owner ByteDance’s cloud unit Volcano Engine became the exclusive AI cloud partner for China Central Television’s Spring Festival Gala, bringing its Doubao assistant to hundreds of millions of viewers. Baidu plans to distribute CNY500 million (USD71.9 million) to Wenxin users, while Tencent Holdings has launched a CNY1 billion red envelope campaign for its Yuanbao AI assistant.

Qwen users also said that attempts to share the Qwen campaign QR-code link on Tencent’s super app WeChat were blocked. WeChat has also blocked similar links related to its own Yuanbao app and to Baidu’s Wenxin promotion.

WeChat said it restricts the sharing of cash red envelope links because these promotions encourage high-frequency sharing, which can disrupt the platform’s ecosystem, lessen the user experience, and potentially lead to user harassment.

Editors: Tang Shihua, Martin Kadiev