Chinese tech giant Alibaba has just unveiled a new version of its artificial intelligence model, Qwen 2.5-Max, claiming it outperforms all competitors' flagship models.
The announcement came on Wednesday, coinciding with the first day of the Lunar New Year, a time when most businesses in China slow down for the holiday.
A statement posted on the official WeChat account of Alibaba's cloud unit claimed that Qwen 2.5-Max outperforms GPT-4o, DeepSeek-V3, and Llama-3.1-405B.
The time of the launch signals the growing pressure Alibaba faces from the rapid rise of Chinese AI startup DeepSeek, which rocked the global AI industry in recent weeks.
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DeepSeek's impact has reverberated across Silicon Valley since the release of its AI assistant powered by DeepSeek-V3 on January 10, followed by the launch of its R1 model on January 20.
The company's low-cost, high-performance AI technology quickly caused tech shares to plummet, prompting investors to question the financial sustainability of major AI firms in the United States.
Chinese AI Changes the Landscape
The success of DeepSeek has spurred intense competition from other Chinese AI developers.
Two days after DeepSeek-R1's release, ByteDance, the parent company of TikTok, introduced an update to its flagship AI model, claiming it surpassed OpenAI's o1 in AIME, a benchmark test for AI comprehension and instruction-following capabilities.
ByteDance has updated its AI model, Doubao-1. https://t.co/kg82J1zPUp
— Cognitive Asia (@CognitiveAsia) January 24, 2025
DeepSeek itself has claimed its R1 model rivals OpenAI's o1 on multiple benchmarks.
The previous version of DeepSeek’s AI model, DeepSeek-V2, launched in May 2023, triggered a price war in China's AI sector.
The model’s open-source availability and ultra-low cost — priced at just 1 yuan ($0.14) per million tokens — led Alibaba and other tech firms to slash AI pricing, with Alibaba announcing discounts of up to 97% on various models.
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Other major Chinese AI companies, including Baidu and Tencent, have since followed suit.
Baidu, which launched China’s first ChatGPT equivalent in early 2023, has continued to push updates to its AI capabilities, while Tencent, China’s most valuable internet company, has also invested heavily in AI development.
DeepSeek's projects are shaping up to be the most significant innovations in the AI space so far, with far-reaching implications that eclipse OpenAI's major developments last December.
