Chinese tech giant Alibaba has unveiled a new version of its artificial intelligence model, Qwen 2.5-Max, claiming it surpasses the highly acclaimed DeepSeek-V3.
“Qwen 2.5-Max outperforms … almost across the board GPT-4o, DeepSeek-V3 and Llama-3.1-405B,” Alibaba’s cloud unit said in an announcement posted on its official WeChat account, referring to OpenAI and Meta’s most advanced open-source AI models.
The announcement, made on the first day of the Lunar New Year—a time when most Chinese businesses pause for celebrations—reflects the urgency of staying competitive amid DeepSeek’s rapid rise.
The emergence of DeepSeek, a Chinese AI startup, has shaken both Silicon Valley and domestic rivals. Its DeepSeek-V3 model, released in January, has drawn global attention for its high efficiency and low operational costs. Just days later, the company launched DeepSeek-R1, which it claims rivals OpenAI’s latest models. This rapid innovation has not only triggered a race among Chinese tech firms but has also caused global tech stocks to tumble, raising concerns about the heavy spending by leading AI firms in the US.
In response, Alibaba’s cloud division has aggressively upgraded its AI capabilities, while competitors like ByteDance—parent company of TikTok—have also enhanced their AI models to match DeepSeek’s benchmarks. Baidu and Tencent, two of China’s biggest tech firms, are also closely following suit.
DeepSeek, led by Liang Wenfeng, said in a rare interview with Chinese media outlet Waves in July that the startup “did not care” about price wars and that achieving AGI (artificial general intelligence) was its main goal.
OpenAI defines AGI as autonomous systems that surpass humans in most economically valuable tasks.
Liang said in his July interview that he believed China’s largest tech companies might not be well suited to the future of the AI industry, contrasting their high costs and top-down structures with DeepSeek’s lean operation and loose management style.
“Large foundational models require continued innovation, tech giants’ capabilities have their limits,” he said.
The startup’s lean structure, primarily staffed by young researchers and PhDs from elite Chinese universities, contrasts sharply with Alibaba’s massive workforce and traditional corporate hierarchy.
DeepSeek’s previous model, DeepSeek-V2, had already caused a price war in China’s AI industry by offering token processing at just 1 yuan ($0.14) per million tokens. This forced Alibaba Cloud to slash its own AI pricing by 97% and pressured other firms to follow suit. Despite the financial impact, DeepSeek remains focused on pushing the boundaries of AI innovation rather than competing on pricing.
As the race for AI supremacy intensifies, Alibaba’s Qwen 2.5-Max launch signals a new chapter in China’s AI evolution, with tech giants scrambling to keep up with DeepSeek’s disruptive advancements.
Melissa Enoch
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