By Liam Mo and Eduardo Baptista

BEIJING, Nov 18 (Reuters) - China's Alibaba 9988.HK has launched a major upgrade to its AI chatbot, marking an aggressive push into the consumer artificial intelligence market where it has lagged rivals.

The new free app, based on its Qwen large language model, is available as a mobile application and website. It has entered public beta testing and is being billed as "the best personal AI assistant with the most powerful model," the company said in a statement on Monday.

The move represents a strategic shift for Alibaba, which has not ploughed significant resources into developing its ChatGPT-style consumer app, instead focusing largely on enterprise customers as part of its cloud services offering.

CHINA'S BRUTAL AI PRICE WAR

It also comes amid a brutal price war in China's domestic AI sector triggered by DeepSeek, which has prioritized low-cost compute costs, forcing its competitors to follow suit.

Alibaba has had some consumer-facing AI apps, including the Tongyi app, which Qwen is rebranded from, as well as AI assistant services embedded in its Quark browser.

But this marks the first time Alibaba has made such a serious push into the consumer market.

Despite being among the first Chinese companies to release a consumer AI assistant app to the public in late 2023, Tongyi has failed to achieve widespread adoption.

The app had 6.96 million monthly active users in September, according to AI product tracker Aicpb.com. Market leader ByteDance's Doubao had 150 million monthly active users, while DeepSeek had 73.4 million and Tencent followed with 64.2 million.

(Reporting by Liam Mo and Eduardo Baptista; Editing by Conor Humphries)

((liam.mo@thomsonreuters.com;))