Alibaba’s shares surged after the Chinese tech giant unveiled its latest AI reasoning model, QwQ-32B, which it claims rivals the cutting-edge DeepSeek-R1 model. The announcement comes as AI players around the world race to produce more efficient and higher-performance models. Alibaba’s Hong Kong-listed shares ended Thursday up 8.39%, hitting a new 52-week high, while the company’s New York-trading stock rose around 2.5% in premarket deals.
Year-to-date, Alibaba shares have gained nearly 71% in Hong Kong. The QwQ-32B model operates with 32 billion parameters, significantly fewer than DeepSeek’s 671 billion parameters. The model utilizes 37 billion parameters during the inference process, which involves running live data through a trained AI model to generate predictions or tackle tasks.
A lower volume of parameters typically signifies higher efficiency, meeting the increasing demand for optimized AI that consumes fewer resources. Alibaba stated that its new model has achieved “impressive results” and that the company can “continuously improve performance, especially in math and coding.” The Chinese giant has been investing in AI since debuting its first model in 2023.
Alibaba’s AI impacts stock surge
The strength of the company’s Cloud Intelligence unit was a key contributor to Alibaba’s performance in the December quarter. “Looking ahead, revenue growth at Cloud Intelligence Group driven by AI will continue to accelerate,” Alibaba CEO Eddie Wu said. Optimism surrounding AI developments could lead to large gains for Alibaba stock and set the company’s earnings “on a more upwardly-pointing trajectory,” according to Bernstein analysts.
“The pace of innovation is incredibly fast right now. It’s really good for the world to see this happening,” Futurum Group CEO Dan Newman said. “When DeepSeek came out, it made everyone question whether OpenAI was the final answer, or if incumbents like Microsoft, Google, or Amazon, which have all made massive investments, would win.”
Newman stressed that large language models are increasingly “becoming commoditized” as developers look to drive down costs and improve access for users.
“As we see more efficiency and costs coming down, usage will go up. The training era, which Nvidia initially built its AI boom off, was significant,” said Newman. “But the inference, the consumption of AI, is really the future, and this will exponentially increase that volume.”
Alibaba’s advancements in AI technology and the positive market response could signal a promising future for the company’s AI initiatives.
Image Credits: Photo by Min An on Pexels
Noah Nguyen is a multi-talented developer who brings a unique perspective to his craft. Initially a creative writing professor, he turned to Dev work for the ability to work remotely. He now lives in Seattle, spending time hiking and drinking craft beer with his fiancee.
