Alibaba’s AI Breakthrough Sends Stock Soaring

Alibaba’s latest move in the artificial intelligence race has sent its shares surging, with Hong Kong-listed stock closing 8% higher following the announcement of its new AI reasoning model, QwQ-32B. 

The news also lifted the Hang Seng China Enterprises Index, which has already climbed more than 30% since January, reflecting renewed investor confidence in China’s tech sector.  

The company claims QwQ-32B outperforms OpenAI’s cost-efficient o1-mini model and rivals the top-performing open-source model, DeepSeek-R1. Despite having only 32 billion parameters compared to DeepSeek-R1’s 671 billion, Alibaba insists its model achieves a “qualitative leap” in mathematics, coding, and general capabilities, positioning it as a more efficient and scalable alternative. 

DeepSeek’s rapid rise earlier this year stunned global investors, proving that China’s AI sector can challenge established Western players.  

Alibaba’s aggressive push into AI is backed by massive investment. Last week, the company announced a commitment of $52.4 billion over the next three years in AI and cloud computing infrastructure, surpassing its total investment in these areas over the past decade. 

This follows the release of its ChatGPT-equivalent, Tongyi Qianwen, in 2023, and its January launch of Qwen 2.5 Max, a model it says outperformed DeepSeek’s V3.  

What Does This Mean for Me?

Beijing’s leadership has thrown its weight behind AI innovation, pledging stronger support for emerging industries, including AI, humanoid robots, and quantum technology. 

As the US-China tech rivalry intensifies, Alibaba’s latest AI leap shows China’s determination to remain competitive in the global AI race, with investors betting big on its future potential.