Alibaba Surges As New AI Model Challenges DeepSeek

Alibaba’s shares in Hong Kong saw a sharp rise on Thursday, leading a rally in Chinese tech stocks. The e-commerce giant’s stock jumped about 7% to HK$140, pushing the Hang Seng Index up by over 1%. This surge came after Alibaba introduced a new open-source artificial intelligence model that rivals DeepSeek.

Alibaba’s AI Breakthrough: QwQ-32B

Alibaba’s AI division, Qwen, has open-sourced its latest model, QwQ-32B, which the company claims performs on par with DeepSeek R1 while requiring significantly less data. This model, first introduced in late 2024 as a competitor to OpenAI’s reasoning AI, remained relatively unnoticed until DeepSeek R1 gained attention earlier this year.

Now, with the AI race heating up in China, Alibaba is positioning itself at the forefront. Initial tests suggest that QwQ-32B matches or even outperforms DeepSeek in reasoning capabilities, making it a key player in China’s AI development.

Tech Stocks Rally on Stimulus Optimism

Alibaba’s stock surge also boosted other Chinese tech giants. Baidu and Tencent climbed nearly 4% and 6%, respectively, while software and AI-related firms saw even bigger gains. Kingdee International soared 20%, Meitu jumped 12%, and Kingsoft added 6.5%. E-commerce competitor JD.com rose 4%, ahead of its quarterly earnings release later in the day.

China’s Stimulus Measures Fuel Market Optimism

Investor sentiment was further lifted by Beijing’s recent announcement of additional economic stimulus. The Chinese government plans to introduce more subsidies for electronics and implement policies to boost consumer spending.

Since late January, Chinese tech stocks, especially in Hong Kong, have been on an upward trend. The release of DeepSeek earlier this year shook up global AI markets, proving that China remains a strong competitor in artificial intelligence. Now, with companies like Alibaba launching competitive AI models, the race is accelerating.