Chinese technology giant Alibaba has introduced an upgraded version of its AI model, Qwen 2.5-Max, claiming it outperforms the highly praised DeepSeek-V3.
“The Qwen 2.5-Max model excels in nearly every aspect compared to GPT-4o, DeepSeek-V3, and Llama-3.1-405B,” said Alibaba’s Cloud Division in an announcement shared on its official WeChat platform, referencing OpenAI and Meta’s top open-source AI models.
The announcement, made on the inaugural day of the Lunar New Year—when many businesses in China take a break for festivities—underscores the need to stay competitive amidst the swift ascent of DeepSeek.
The rise of DeepSeek, a nascent AI firm from China, has unsettled both Silicon Valley and local competitors. Its DeepSeek-V3 model, which debuted in January, has attracted global interest due to its high efficiency and low operational costs.
Shortly thereafter, the startup introduced DeepSeek-R1, claiming it rivals OpenAI’s latest offerings. This fast-paced innovation has sparked competition among Chinese tech companies while also causing a decline in global tech stocks, raising alarms about the significant expenditures by major AI firms in the US.
In retaliation, Alibaba’s cloud unit has been vigorously enhancing its AI technology, with rivals like ByteDance, which owns TikTok, upgrading their AI systems to align with DeepSeek’s standards. Baidu and Tencent, two of China’s largest tech companies, are likewise taking similar steps.
DeepSeek’s earlier model, DeepSeek-V2, had already spurred price competition within China’s AI sector by providing token processing for only 1 yuan ($0.14) per million tokens. This prompted Alibaba Cloud to reduce its AI pricing by 97% drastically and pressured other companies to do the same.
Despite the financial repercussions, DeepSeek is committed to advancing AI innovation rather than engaging in price competition.
As the contest for AI dominance escalates, Alibaba’s Qwen 2.5-Max launch marks a new phase in China’s AI development, with major tech firms racing to keep pace with DeepSeek’s groundbreaking advancements.
