Alibaba unveils lifelike avatar upgrade to its video AI model

Alibaba has rolled out an update to its open-source video-generating AI model that can turn portrait photos into highly realistic, “film-quality” avatars capable of speaking, singing, and performing. The company announced the upgrade on Tuesday (Aug. 26), describing it as part of a rapid pace of AI development designed to keep up with growing competition at home and abroad. Alibaba’s push comes after the rise of DeepSeek earlier this year, which spurred the Chinese tech giant to accelerate its AI research. Chairman Joe Tsai admitted at the Viva Tech 2025 conference in Paris that the company felt it was falling behind after reviewing DeepSeek’s research. Shortly afterward, Alibaba introduced its Qwen series of large language models, open-sourcing many of the smaller versions to encourage innovation and bolster demand for its cloud infrastructure. The avatar upgrade is the latest sign of Alibaba’s bid to hold its ground against rivals such as Google, AI startup Manus, and Kuaishou Technology, which have all launched or improved video AI tools in recent months. Bloomberg reported that despite Alibaba’s investments, the financial payoff has yet to materialize. The company’s May results showed a modest 7% revenue increase amid weak consumer spending, and its next earnings report is due Aug. 29. The move reflects Alibaba’s broader strategy to make AI more accessible while positioning itself as a key enabler of third-party applications. By open-sourcing models, the company aims to democratize AI and attract developers while simultaneously driving usage of its cloud services. Meanwhile, industry-wide trends suggest uneven readiness for more advanced “agentic AI” systems. A new PYMNTS analysis highlights that software and financial services firms are surging ahead thanks to technical expertise and agile risk cultures, while industries like manufacturing, logistics, and retail lag behind due to complexity and lower returns. Alibaba’s latest step underscores how the global AI race is increasingly tied to trust, innovation speed, and sector-specific advantages. With the new avatar tools, the company hopes to showcase both creative and commercial applications that could strengthen its foothold in the evolving AI landscape.