OpenAI, DeepSeek, And Now Alibaba—China's New AI Model Is Shaking Up The Competition

OpenAI and DeepSeek have been making headlines, but now a new challenger from China is entering the fray. Alibaba's latest AI model is set to shake up the industry, marking a significant shift in the competitive landscape of artificial intelligence (AI) development.

On 6 March, Chinese tech giant Alibaba unveiled its latest AI reasoning model, claiming it outperforms similar models developed by OpenAI and the startup DeepSeek. The announcement sent Alibaba's Hong Kong-listed shares soaring by 8% by the end of the day and contributed to gains in the Hang Seng China Enterprises Index.

Manus: The Rise Of General AI Agents

Just one day before Alibaba's AI model debut, another company unveiled 'Manus,' a 'general AI agent.' The Manus website features a video demonstrating its ability to execute complicated, step-by-step actions, such as sorting resumes and developing web pages. As reported by Reuters, the Chinese company Monica is behind Manus.

The video further highlights that this AI agent surpasses a basic chatbot, as it conceives ideas and provides actual outcomes, like generating a property recommendation report based on set requirements.

Alibaba's AI Leap: Challenging The Leaders

In an online announcement, Alibaba praised its latest model, QwQ-32B, stating it provides 'exceptional performance, almost entirely surpassing OpenAI-o1-mini and rivalling the strongest open-source reasoning model, DeepSeek-R1.' OpenAI-o1-mini is the budget-friendly reasoning model that the U.S. company launched last year.

In the same statement, Alibaba further mentioned that the model has made a 'qualitative leap in mathematics, coding, and general capabilities, with overall performance on par with DeepSeek R1.'

The company stated that its model uses 32 billion parameters, while DeepSeek's R1 employs 671 billion. Fewer parameters mean the model is smaller and takes fewer resources to train.

In January, DeepSeek amazed the world with its highly effective reasoning model, R1, claiming it cost significantly less to train than established Western counterparts. This success has reinforced global investor belief in the innovative capacity of Chinese firms amidst the escalating U.S.-China technology battle. Since January, the Hang Seng China Enterprises Index has increased by over 30%.

China's AI Vision: Backing Future Technologies

Alibaba, the company behind China's popular online shopping sites Taobao and Tmall, launched its ChatGPT-like service, Tongyi Qianwen, in 2023, following OpenAI's groundbreaking AI reasoning model release.

The company introduced Qwen 2.5 Max in January, claiming it outperformed DeepSeek's widely praised V3 model, which had only been released a few weeks prior. Alibaba recently announced plans to pour at least £40.51 billion (380 billion yuan) into its AI and cloud computing framework in the next three years, stating that this figure is more significant than its cumulative investment in these fields during the last decade.

On Wednesday, Chinese leadership announced their commitment to support 'emerging industries and industries of the future,' notably by boosting funding for artificial intelligence, robots designed to resemble humans and quantum technology.

These rapid advancements and substantial investments are pivotal in the global AI race. As Chinese tech giants like Alibaba continue to push the boundaries of AI capabilities, the competitive landscape is set for further transformation. The coming years will undoubtedly reveal the full extent of this technological leap and its impact on the world.