In a surprise move on the first day of the Lunar New Year, Chinese tech giant Alibaba  (9988.HK) launched its latest artificial intelligence model, Qwen 2.5-Max, claiming it has  outperformed rivals including DeepSeek’s highly praised DeepSeek-V3. The launch,  announced by Alibaba’s cloud unit on its official WeChat account, comes as the AI  landscape in China is rapidly evolving, with DeepSeek’s recent success sparking a  scramble among domestic competitors to upgrade their models. 

Alibaba’s new Qwen 2.5-Max was positioned as a major leap over other leading  models, including OpenAI’s GPT-4, DeepSeek-V3, and Meta’s Llama-3.1-405B, with the  company highlighting its model’s superior performance across various benchmarks.  This release follows the impressive performance of DeepSeek, a Chinese AI startup  that has captured global attention with its low-cost and high-performance models.  

DeepSeek’s rapid rise, especially after its DeepSeek-V2 model triggered a price war in  the AI industry last May, has forced even the biggest players in China to react. Just  days after DeepSeek’s launch of its R1 model in January, ByteDance released an  update to its own AI, claiming it surpassed OpenAI’s o1 in AIME, a benchmark for AI  comprehension.

Liang Wenfeng, DeepSeek’s founder, has expressed his belief that large tech  companies like Alibaba may not be the best equipped for the future of AI, citing their  higher operational costs and hierarchical structures compared to DeepSeek’s lean,  research-driven model. Despite this, Alibaba’s new Qwen model signifies its resolve to  maintain a competitive edge in a market increasingly driven by innovation from startups  like DeepSeek. 

The fierce competition among AI companies in China comes as DeepSeek continues to  challenge the dominant players in the sector, raising doubts about the sustainability of  massive spending by U.S. firms. Investors are closely watching how these domestic  battles will reshape the future of AI development, both in China and globally. 

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Jack Ma

Businessman using laptop with AI

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