Alibaba’s new AI model, Qwen 2.5, is emerging as a serious challenger to Western tech giants, promising superior performance at lower costs. The advances in artificial intelligence are rapidly increasing, and in China, powerful models are being developed that are seen as viable alternatives to Western technologies from companies like OpenAI or Meta. After Deepseek made headlines, Alibaba is now following suit with its new AI model, Qwen 2.5, claiming it can outperform the competition.
Alibaba recently introduced its new AI model, Qwen 2.5. In an official announcement on WeChat, the company’s cloud division stated that Qwen 2.5 outperforms established models like GPT-4, Deepseek-V3, and Llama in nearly all performance areas. The release of Alibaba Qwen 2.5 highlights the rapid development in the race for powerful AI models. The market has responded positively, with Alibaba’s stock rising by 2.71 percent to 94.60 euros. An article in Forbes points out that Alibaba is specifically responding to Deepseek-V3, whose novel architecture has attracted attention. On January 26, 2025, the Deepseek App reached a milestone by rising from sixth to first place in the US free app store charts on Apple. While Deepseek-V3 impresses with a cost-effective training method using older Nvidia GPUs, Alibaba counters with Qwen 2.5, emphasizing that Qwen 2.5 overshadows the much-discussed Deepseek-V3.
The tech world is amazed: China is rapidly bringing new open-source AI models to the market. This has led some to wonder if the country is on “LSD,” a provocative comment from a notable Threads post by Shoaib Ali that captures the excitement in the industry. Deepseek, in particular, is causing a stir and putting established Chinese tech giants Alibaba, Baidu, and Tencent under pressure. The race for more powerful models has dramatically accelerated in recent months, accompanied by an aggressive price war. Since Deepseek released its “V2” model, prices for AI services have plummeted, a clear sign of growing competition and innovation pressure.
This dynamic is also reflected in the stock market: the China Tech Giants Index recently rose by 3.25 percent, indicating that investors believe in the success of these developments. At the same time, the fierce competition is driving companies to develop more efficient and cost-effective AI solutions to maintain their market position. In short, China’s AI offensive is in full swing and shows no signs of slowing down.
On an international level, an intense competition for dominance in artificial intelligence has erupted. While players like OpenAI, Google, and Meta are investing enormous sums in ever more powerful systems, Chinese providers are focusing on particularly cost-effective and optimized alternatives. These developments could not only change the AI industry sustainably but also influence global technology and economic policy.
For investors, the AI market remains an exciting field: Chinese tech stocks have gained significant value in recent months. This is evident in the China Tech Player Index, which recorded a growth of 38 percent in six months. With innovative technologies and well-thought-out pricing strategies, Alibaba, like Deepseek, could remain a serious competitor to Western tech giants.
Besides the technological competition, larger questions about data protection and copyright are coming into focus. The parallels to discussions about TikTok show that Chinese AI models are increasingly under critical scrutiny, both regarding their training data and censorship regulations as well as possible connections to Western developments. While US companies are interested in acquiring or merging with TikTok’s US business, participation of US companies in Chinese AI projects could open new paths. In this context, the competition between Alibaba Qwen 2.5 and Deepseek-V3 could gain importance, as strategic collaborations or investments could influence global AI development.