Meta Turns To Alibaba's Qwen To Train Its Next AI Model

Meta Platforms Inc (NASDAQ:META) is taking steps to revamp its artificial intelligence strategy by incorporating open-source models from leading technology companies.

Meta has reportedly turned to an open-source artificial intelligence model built by Alibaba Group Holding Limited (NYSE:BABA) to revive its struggling AI strategy, signaling another potential boost for China's fast-rising AI ecosystem.

Bloomberg reported Wednesday that Meta is using Alibaba's Qwen model, alongside open-source systems from Alphabet Inc.’s (NASDAQ:GOOGL) Google and OpenAI, to train a new AI model code-named Avocado, which the company aims to release in the spring.

Also Read: Meta Resets AI, Hardware Plans As ‘Avocado’ Delays, Leadership Turmoil, Cost Cuts Mount

According to Bloomberg, Avocado will reportedly be available only through an Application Programming Interface (API), indicating a move toward a closed, revenue-driven approach.

Inside Meta's New TBD Lab

The new Avocado model is being built inside Meta's recently formed TBD Lab, staffed with researchers Meta acquired at high cost and led by new chief AI officer Alexandr Wang, whose previous company Meta bought for $14.3 billion.

Bloomberg noted that TBD Lab is "distilling" Qwen and other open-source models to train Avocado, a controversial technique in which developers use outputs from other models to accelerate training.

Meta stock gained over 11% year-to-date as it navigated its AI and metaverse ambitions.

Reportedly, Meta is raising prices on its virtual reality devices and slowing new hardware releases as it focused on premium products and reallocated resources from metaverse projects to AI initiatives.

The company is tightening budgets at Reality Labs, delaying mixed-reality hardware, and reshaping leadership to focus on high-return AI efforts, a broad shift aimed at unlocking more long-term value.

Analyst Views on Meta's Cost Discipline

Wall Street analysts noted Meta's plan to cut up to 30% of its 2026 Metaverse budget could unlock billions in savings and strengthen EPS growth, despite its surging AI and data-center investment.

JPMorgan's Doug Anmuth and Bank of America Securities' Justin Post view the cuts as a positive move that reins in Reality Labs losses, creates room for Meta's heavy capex cycle, and helps refocus spending on higher-return AI initiatives.

META Price Action: Meta Platforms shares were up 0.20% at $651.41 at the time of publication on Thursday, according to Benzinga Pro data.

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