Alibaba Group’s unveiling of its latest artificial intelligence reasoning model on Thursday has sent ripples through the tech world and financial markets. The Chinese tech giant’s new QwQ-32B model claims to outperform rival offerings from OpenAI and startup DeepSeek, showcasing China’s growing prowess in the AI race.
The announcement triggered a significant market response, with Alibaba’s Hong Kong-listed shares (9988.HK) closing 8% higher. This surge contributed to a broader uplift in the Hang Seng China Enterprises Index, reflecting growing investor confidence in Chinese tech innovation.
Alibaba’s QwQ-32B model boasts 32 billion parameters, a fraction of the 671 billion parameters in DeepSeek’s R1 model. Despite this difference, Alibaba claims its model delivers “exceptional performance, almost entirely surpassing OpenAI-o1-mini and rivaling the strongest open-source reasoning model, DeepSeek-R1”. The company emphasized a “qualitative leap” in mathematics, coding, and general capabilities, positioning QwQ-32B as a formidable competitor in the AI landscape.
This development comes on the heels of another significant AI breakthrough in China. Just a day earlier, a company called Monica unveiled “Manus,” described as a “general AI agent” capable of executing complex, multi-step tasks autonomously. Manus reportedly goes beyond chatbot functionality, delivering tangible results such as screening resumes and creating websites.
The rapid advancements in Chinese AI technology are not occurring in isolation. Last week, Alibaba announced plans to invest at least 380 billion yuan ($52.4 billion) in AI and cloud computing infrastructure over the next three years, surpassing its investments in these areas over the past decade. This commitment aligns with the Chinese government’s recent pledge to support “emerging industries and industries of the future,” including increased funding for artificial intelligence, humanoid robots, and quantum technology.
These developments have bolstered investor confidence in Chinese tech companies’ innovative capabilities, particularly as the US-China tech rivalry intensifies. Since January, when DeepSeek unveiled its high-performing R1 model, the Hang Seng China Enterprises Index has surged over 30%.
Alibaba’s AI journey began in 2023 with the launch of its ChatGPT-equivalent service, Tongyi Qianwen. The company has since released several models, including Qwen 2.5 Max in January 2025, which it claimed surpassed the performance of DeepSeek’s highly acclaimed V3 model.
As the global AI race heats up, Chinese companies are demonstrating their ability to compete with and potentially surpass Western counterparts. The efficiency of Alibaba’s QwQ-32B model, with its relatively low parameter count, suggests a focus on resource-efficient AI solutions that could have significant implications for the industry’s future.
With these rapid advancements and substantial investments, China is positioning itself as a major player in the global AI landscape. As the technology continues to evolve, the competition between Chinese tech giants and their Western counterparts is likely to intensify, driving innovation and potentially reshaping the global tech industry.
