Alibaba Group, the Chinese tech giant known for its dominance in e-commerce and cloud computing, has just made waves in the artificial intelligence (AI) industry.
On March 5, 2025, the company announced QwQ-32B, a cutting-edge AI model designed to rival DeepSeek-R1, a high-performance reasoning model from Chinese AI firm DeepSeek. This move triggered a strong market reaction, sending its shares soaring in both Hong Kong and New York.
Following the unveiling of QwQ-32B, Alibaba’s Hong Kong-listed shares skyrocketed by 8.39% by the close of trading on March 6, 2025, marking a fresh 52-week high. Meanwhile, in the United States, Alibaba’s stock gained approximately 2.5% in premarket trading, reflecting strong investor enthusiasm.
Market analysts attribute this rally to the growing significance of AI in Alibaba’s business strategy, particularly within its cloud intelligence unit. This segment has been a key profit driver, and QwQ-32B could strengthen Alibaba’s positioning against global AI powerhouses such as OpenAI, DeepSeek, and Google’s DeepMind.
QwQ-32B, part of Alibaba’s Qwen family of models, is an advanced reasoning AI designed for complex problem-solving, including mathematics and coding tasks. With 32 billion parameters, it might seem modest compared to DeepSeek-R1’s colossal 671 billion parameters. However, the model’s efficiency sets it apart.
DeepSeek-R1 activates only 37 billion of its parameters during inference, meaning QwQ-32B achieves comparable performance with far fewer resources. This is a crucial development in AI, where efficiency and cost-effectiveness are becoming just as important as sheer processing power. QwQ-32B also supports prompts up to 32,000 words and leverages reinforcement learning techniques to improve reasoning capabilities.
Industry benchmarks back up Alibaba’s claims. In tests such as the American Invitational Mathematics Examination (AIME) and MATH, QwQ-32B has matched or exceeded DeepSeek-R1’s performance. It has also demonstrated high proficiency in coding tasks, as evidenced by its rankings on the LiveCodeBench assessment.
Alibaba’s latest AI breakthrough underscores the intensifying global competition in artificial intelligence. The cloud intelligence sector has become a battleground for major tech companies, and Alibaba is positioning itself as a leader in efficient AI deployment.
This innovation aligns with broader industry trends. AI is moving toward greater accessibility, with companies focusing on more efficient models that reduce costs without compromising performance. As Bernstein analysts noted, developments like QwQ-32B could put Alibaba’s earnings on an “upward trajectory,” attracting more cloud customers and expanding revenue streams.
Dan Newman, CEO of Futurum Group, commented on CNBC’s “Squawk Box Europe” that the AI industry is reaching a pivotal moment. “The training era, which Nvidia really built its AI boom on, was a big moment, but the inference—the actual usage of AI—is the future,” he said. “Models like QwQ-32B will exponentially increase AI’s accessibility and adoption.”
DeepSeek-R1, an open-source model developed by DeepSeek, has been praised for its reasoning abilities and is comparable to OpenAI’s models. However, QwQ-32B’s superior efficiency could set a new standard for AI development, particularly in reducing resource consumption while maintaining high performance.
Alibaba’s AI push comes at a time when the company is seeking new avenues for growth. Its cloud intelligence unit is a key profit driver, and the success of QwQ-32B could attract more enterprise clients looking for cost-efficient AI solutions.
The company’s stock has already gained nearly 71% in Hong Kong this year, reflecting investor confidence in its strategy. With AI playing an increasingly central role in tech competition, Alibaba’s latest innovation could be a turning point in the industry.
With QwQ-32B now in the spotlight, Alibaba is expected to continue refining its AI capabilities. The company has made the model open-source under an Apache 2.0 license, allowing developers worldwide to test and improve its performance. However, regulatory challenges remain, particularly as China imposes tight controls on AI-generated content.
As AI technology becomes more efficient and widely available, the competition between tech giants will only heat up. With QwQ-32B proving that smaller models can deliver powerful results, Alibaba has positioned itself as a serious contender in the global AI race.
