Alibaba Strikes Back With New AI Model To Rival DeepSeek In China

On Thursday, Alibaba Group Holding BABA cloud unit launched a new artificial intelligence model in its “Qwen series.“

The new “Qwen2.5-Omni-7B” is a multimodal model that can process inputs, including text, images, audio, and videos, while generating real-time text and natural speech responses, CNBC cites from Alibaba Cloud’s website.

The company can deploy the model on edge devices like mobile phones. Now, visually impaired people can navigate their environment through real-time audio descriptions.

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Alibaba open-sourced the new model on the platforms Hugging Face and Github.

The emergence of Chinese AI startup DeepSeek and claims of affordable AI models led to Nvidia Corp NVDA losing $600 billion in market cap in a single day. DeepSeek’s AI model fueled a $1 trillion market wipeout in the U.S. and also fueled a domestic price war, prompting Chinese Big Tech companies to roll out affordable AI models.

Reports in January indicated that Alibaba’s Qwen2.5-VL AI model surpasses GPT-4o and Claude 3.5 in video analysis, math and document parsing capabilities. Qwen2.5-VL can control devices, analyze charts, and book flights, showcasing advanced AI applications for practical use.

Last week, Baidu Inc BIDU launched a new multimodal foundational model and its debut reasoning-focused model.

Alibaba has committed $53 billion in its cloud computing and AI infrastructure over the next three years.

Kai Wang of Morningstar told CNBC that large Chinese tech players like Alibaba are well-positioned to benefit from China’s post-DeepSeek AI boom.

On Wednesday, Alibaba and Bayerische Motoren Werke AG BMWYY announced they expanded their collaboration to co-develop an AI assistant using Qwen LLM for Neue Klasse models, which will launch in China in 2026.

In March, Alibaba Chair Joe Tsai told CNBC that AI’s total addressable market is at least $10 trillion, topping industries like transportation and healthcare insurance. Tsai expects Alibaba to benefit from this upsurge of AI courtesy of its cloud computing business.

Alibaba stock surged 85% in the last 12 months.

Price Action: BABA stock is up 1.29% at $133.95 premarket at last check Thursday.

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