Alibaba's new AI model outperforms DeepSeek, OpenAI offerings
What's the story
Alibaba has unveiled a new open-source AI reasoning model, the QwQ-32B, which it claims outperforms DeepSeek's R1 and OpenAI's o1-mini. Despite having just 32 billion parameters versus R1's 671 billion, QwQ-32B has demonstrated better performance in math, coding and general problem-solving. The feat emphasizes Alibaba's strong AI prowess across models and data center infrastructure. QwQ-32B can be accessed through Hugging Face, the world's largest open-source AI model community.
Stock performance
Alibaba's new model drives surge in shares
The unveiling of the QwQ-32B model has sent Alibaba's Hong Kong-listed shares soaring. The stock rose by 7.2% to HK$139.30 during Thursday morning trading. The surge was fueled by the company's claim that its new model is superior to DeepSeek's R1 while only requiring a fraction of the data. Alibaba's team credited the enhanced performance of its new reasoning model to reinforcement learning techniques, akin to those employed by DeepSeek in creating its R1 model.
Design advantages
Alibaba's model design promotes wider adoption
The lower parameter count of the QwQ-32B model enables it to work with lesser computing resource requirements. This is expected to encourage the wider adoption of the AI system. The sleek design of Alibaba's new model also matches with the views of Joe Tsai, chairman of Alibaba Group Holding, who emphasized practical applications as key to maximizing intelligence in AI model development.
Investor sentiment
Alibaba's AI progress fuels investor optimism
Alibaba's AI push and increasing backing from Beijing have stoked investor enthusiasm. "There are quite a few positive drivers for Alibaba with their open-source reasoning model being the latest catalyst," said Vey-Sern Ling, managing director at Union Bancaire Privee. He added, "Their core business is improving and clearly will benefit from China's push to drive consumption. Investors now also recognize the value that AI will bring to their cloud computing business."
Investment strategy
Alibaba's ambitious AI infrastructure investment plan
Alibaba has pledged to invest more than 380 billion yuan ($52 billion) in AI infrastructure, including data centers, over the next three years. One of China's largest AI infrastructure budgets, it highlights Alibaba's ambition to lead in the field. However, some investors are questioning if tech companies are overestimating future demand for AI services and the capital needed to build them.