📰 Alibaba Takes On DeepSeek With New AI Model

The Chinese tech giant claims its latest Qwen 2.5 outperforms major AI models, intensifying competition in the industry.

Alibaba BABA 0.00%↑ has introduced a new version of its AI model, Qwen 2.5, which it claims surpasses the much-talked-about DeepSeek-V3. The timing of the release—right at the start of the Lunar New Year—is unusual, signaling the pressure from DeepSeek’s rapid rise.

Alibaba says Qwen 2.5-Max performs better than OpenAI’s GPT-4o, DeepSeek-V3, and Meta’s Llama-3.1-405B across various benchmarks. The announcement comes just weeks after DeepSeek’s AI assistant and its R1 model shook up the market, leading to a selloff in AI stocks as investors questioned the massive spending of US-based AI firms.

The competition within China is heating up as well. ByteDance, the parent company of TikTok, quickly responded to DeepSeek’s success with its own AI update, claiming it outperforms OpenAI’s latest models. The rivalry has also driven price cuts, with DeepSeek’s open-source model forcing Alibaba and others to lower their AI service costs.

DeepSeek operates differently from its larger competitors. While Alibaba and Tencent employ thousands, DeepSeek is run like a research lab, staffed mainly by young graduates and PhD students. Its founder, Liang Wenfeng, has dismissed price wars, stating that DeepSeek’s main goal is to achieve artificial general intelligence (AGI), AI that can perform tasks better than humans.

Alibaba, however, is not just competing on performance. Its Qwen 2.5-VL model goes beyond text and image analysis, allowing AI to control computers and mobile apps. This puts it in direct competition with OpenAI’s Operator. The model can analyze complex documents, recognize objects in images, and even book flights via apps.

Source: Qwen Blog

Despite its strengths, Qwen 2.5-VL has limitations. While it can interact with software, its performance in real-world computer tasks is still behind OpenAI’s offering. Additionally, as with most AI models developed in China, it faces government-imposed restrictions on certain topics.

As the AI arms race continues, both DeepSeek and Alibaba are pushing the boundaries of what’s possible. With models evolving rapidly, the competition is only just beginning.

Source: Reuters, TechCrunch

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