Alibaba Steps Up AI Game With Qwen 3, Challenging DeepSeek's Low-Cost AI Success

Alibaba Group Holding BABA plans to release Qwen 3, an upgraded version of its flagship AI model, by April.

China’s tech leaders have flooded the market with affordable AI services since a domestic AI startup, DeepSeek, showcased a robust model that it said cost just several million dollars to build, Bloomberg reports.  

OpenAI, Alphabet Inc GOOG GOOGL Google and Anthropic have similarly released new models.

Also Read: Alibaba’s March Expo Sparks 27% Jump In US Small Business Orders

The wave of new Asian models is questioning the sustainability of the high-end U.S. offerings from  OpenAI, Google, and Microsoft Corp MSFT.

Last week, Alibaba launched a new model in its Qwen 2.5 series that can process text, pictures, audio, and video and run directly on mobile phones and laptops. It showcased a new version of the AI assistant Quark app in March.

After grappling with domestic regulatory crackdowns, leadership reshuffles, and collapsing market confidence, Alibaba stock noted a turnaround. A rallying call from co-founder Jack Ma in late 2023 helped ignite a turnaround that has pushed the company’s U.S.-listed shares up 56% year-to-date, adding more than $100 billion to its valuation.

Under the leadership of Eddie Wu and Joe Tsai, the company has since leaned into artificial intelligence.

The return of Alibaba co-founder Jack Ma to public view, particularly during a meeting with President Xi Jinping in February, signaled improved relations between Alibaba and China’s leadership.

Dan Ives of Wedbush Securities called Alibaba the “best way to play China tech,” citing its strong positioning in AI and cloud.

Price Action: BABA stock is down 3.15% at $125.70 premarket at last check Wednesday.

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