Alibaba shares surge after launch of new AI model to rival DeepSeek’s R1

Stock prices of the Alibaba group surged on Thursday after the conglomerate introduced QwQ-32B, a new artificial intelligence model. The AI reasoning model has claimed that it can compete with DeepSeek-R1, a breakthrough model that has reshaped the AI landscape.

In Hong Kong, Alibaba’s stock climbed by 8.39 percent and reached a 52-week high. Meanwhile, New York-listed shares rose by 2.5 percent in premarket trading. The company’s stock has gained nearly 71 percent in Hong Kong year-to-date. This reflects a strong investor optimism around its AI initiatives.

Alibaba’s AI leap

Operating with only 32 billion parameters, Alibaba’s QwQ-32B is not directly comparable to DeepSeek’s 671 billion parameters. However, its unrivalled reasoning ability is completely within reach as efficiency is fine-tuned, a CNBC report stated.


According to the report, in the AI sector where cost-effective solutions are the name of the game, lower parameter counts mean a higher resource efficiency, which alone can be a noticeable advantage.

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Alibaba’s QwQ-32B has achieved impressive results and is expected to keep getting better, especially in math and coding, the company said.

Since the launch of DeepSeek-R1, AI companies around the world have been competing to build faster and more efficient models. Chinese firms like Alibaba are pushing their AI capabilities aggressively and are seeing it as a major driver of growth going forward.

Cloud intelligence and AI: The future of Alibaba’s growth

Alibaba has been investing a lot in AI, with its Cloud Intelligence Group contributing greatly to the firm's profit rise in the December quarter. The report added that CEO Eddie Wu remarked that AI-led revenue growth in cloud computing will continue to grow at an accelerated pace.

Bernstein analysts are of the view that Alibaba's AI innovations have the potential to drive earnings higher. Meanwhile, Futurum Group CEO Dan Newman told CNBC that competition in AI was heating up. He pointed out that AI models are becoming "commoditised", so efficiency and cost savings are key.

The road ahead for AI and Alibaba

With AI leaving the training phase behind, attention is turning towards inference or real-time usage of artificial intelligence. This shift is set to drastically scale up AI adoption for the benefit of companies like Alibaba that are leading in creating and implementing AI models.

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FAQs

What is Alibaba's QwQ-32B model?
Alibaba's QwQ-32B is the latest AI reasoning framework that aims to rival DeepSeek-R1 with greater efficiency and fewer parameters.

Why did Alibaba's stock go up?
Alibaba shares jumped after it revealed its AI achievement, which may expand cloud sales and fuel AI-led growth.