Market Analysis

Image Credit: Reuters

Alibaba Group's Hong Kong-listed shares jumped over 8% on Thursday following the release of its new reasoning model, which the company claims is on par with DeepSeek's R1, a leading global AI model.

The announcement came shortly after the Chinese government vowed to increase support for industries such as AI, humanoid robots, and 6G telecom. These sectors are seeing growing adoption by both government agencies and smaller companies across China.

Alibaba introduced the new model through its chatbot service, Qwen Chat, offering various models, including the powerful Qwen2.5-Max. The QwQ-32B model showed strong performance in areas like mathematical reasoning, coding, and problem-solving in benchmark tests, competing closely with top models like OpenAI's o1 mini and DeepSeek's R1.

With DeepSeek emerging as a symbol of China's AI capabilities, the model offers comparable performance to OpenAI’s models but at a fraction of the cost and using less computing power.

Analysts highlighted that government-backed initiatives will further boost AI usage in China, with Sun Wei, a principal AI analyst at Counterpoint, noting that China is building an AI ecosystem focused on immediate, real-world economic benefits.

Alibaba’s shares soared to HK$140.5 following the announcement.

Paraphrasing text from "Reuters" all rights reserved by the original author