Adam Clark

Alibaba Group Holding stock was rising early on Thursday. The Chinese e-commerce company has released another artificial-intelligence model as it seeks to take the crown of the country's leading AI developer from DeepSeek.

Alibaba said the latest version of its Qwen AI was a reasoning model comparable with DeepSeek's R1. Chinese start-up DeepSeek shocked the world last month when the company claimed it had developed AI models rivaling Western peers at a fraction of the development and operating costs, although questions have been raised about the true scale of spending behind the technology.

Alibaba's newest model, named QwQ-32B, showed similar capabilities in tests for mathematical reasoning, coding and general problem-solving to DeepSeek and ChatGPT-developer OpenAI's latest technology according to a blog post on Thursday.

Alibaba shares gained 8.4% in Hong Kong trading. Its American depositary receipts were rising 2.1% in Thursday premarket trading after gaining 8.6% the previous day.

Notably, Alibaba said that the new model only has 32 billion parameters -- a measure of an AI model's size and complexity -- compared with DeepSeek R1's 671 billion parameters. However, it is worth noting that one of the reasons DeepSeek's model can run at lower costs than some competing models is because only 37 billion parameters are active at any one time.

Alibaba's ADRs have risen 66% this year so far as of Wednesday's close, powered by progress in AI which includes providing the technology for Apple iPhones in China. Alibaba said recently that it would invest at least 380 billion yuan ($52.4 billion) in cloud computing and AI over the next three years.

Alibaba was a Barron's stock pick for 2025, noting the potential for its low valuation to increase if investors warmed to the Chinese market.

Write to Adam Clark at adam.clark@barrons.com

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March 06, 2025 08:27 ET (13:27 GMT)

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