Alibaba’s shares surged more than seven percent in Hong Kong trade on Thursday after the Chinese tech giant launched a new artificial intelligence model, QwQ-32B, which it claims can compete with DeepSeek, the breakout tech sensation of the year.
Since January, investors have been optimistic about China’s AI potential, following DeepSeek’s introduction of a cutting-edge chatbot that was developed at a fraction of the cost expected by Western industry leaders. Alibaba announced on Thursday that its new AI model, QwQ-32B, delivers “comparable performance” to DeepSeek while requiring significantly less data to operate.
The surge in Alibaba’s stock occurred before a midday pause in trading at the Hong Kong Stock Exchange. China’s tech industry has seen a boost in market confidence in recent weeks. Alibaba co-founder Jack Ma, who had been absent from the public eye, was spotted meeting with Chinese President Xi Jinping at a symposium for top business leaders last month, signaling a potential return to the spotlight. Ma had been critical of government regulations in late 2020, just before Beijing halted Alibaba’s highly anticipated IPO, and a subsequent regulatory crackdown erased over a trillion dollars from the value of China’s major tech companies. However, his recent involvement in the meeting suggests a possible public rehabilitation after his clashes with regulators.
The debut of DeepSeek earlier this year has been well-received by Chinese authorities, who have been working to rejuvenate the country’s economy. Alibaba’s QwQ-32B now enters an increasingly competitive domestic market, facing off with DeepSeek and Tencent’s AI model, Yuanbao.
In a positive move for the tech industry, Beijing also promised on Wednesday to ramp up support for consumer spending, which has been sluggish since the Covid-19 pandemic.
Based in Hangzhou, Alibaba, which operates some of China’s largest online shopping platforms, revealed last month that it plans to invest over $50 billion in AI and cloud computing over the next three years.
