Alibaba collaborates with BMW to enhance AI technology for cars in China

Alibaba Group Holding and BMW AG are collaborating to develop AI technologies for vehicles in China. This partnership aims to help the tech giant monetize its innovative products while assisting the German automaker in keeping pace with local brands that are leading the crucial market.

According to a joint statement released on Wednesday, BMW will implement AI cockpit technology from Banma, a company backed by Alibaba, in its upcoming models designed specifically for the Chinese market. This technology is a result of a partnership with Alibaba’s Qwen model team.

In the competitive landscape of electric vehicles, software has emerged as a significant differentiator, especially in China, where local manufacturers such as BYD Co. have outpaced European automakers. Companies like Volkswagen, Mercedes-Benz Group, and BMW have sought tech partnerships from Silicon Valley to China to acquire the necessary technological expertise for their next generation of competitive vehicles.

China is a critical market for BMW, but the company experienced a 13.4% decline in sales for its namesake brand and Mini last year, with expectations for subdued deliveries this year.

To enhance its competitiveness, Alibaba will assist BMW in developing a new intelligent personal assistant featuring improved voice recognition and trip planning capabilities, set to debut next year in new models produced in China. This in-car AI agent will provide parking suggestions, nearby restaurant recommendations, and real-time traffic light updates.

Alibaba noted that its Qwen model has already been implemented in vehicles from Chinese manufacturers Xpeng, Zeekr, and Leapmotor.

Recently, Alibaba has been shifting its focus towards AI, committing over 380 billion yuan ($52 billion) to AI infrastructure such as data centers over the next three years. CEO Eddie Wu mentioned in February that the pursuit of artificial general intelligence is now the company’s “primary objective.” Additionally, the company has secured a significant role in providing AI technology for Apple Inc.’s iPhones in China, anticipated to launch in the upcoming months.

Georges Massing, an executive at Mercedes-Benz Group AG, remarked this week that Europe’s reliance on the US and China for the computing power necessary for AI puts its automotive industry at risk. “We have in Europe neither a cloud nor hardware that can train these models,” Massing stated.

After facing challenges with its own software initiatives, Volkswagen AG is now teaming up with Rivian Automotive and China’s Horizon Robotics Inc. to develop technology for its upcoming electric vehicle lineup. Conversely, Mercedes is investing in the Chinese AI startup Momenta to strengthen its driver-assistance systems.

© 2025 Bloomberg

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