BEIJING: Chinese tech giant Alibaba has introduced its latest AI model, Qwen 2.5, asserting its superiority over DeepSeek-V3. The announcement came on the first day of the Lunar New Year, a surprising move. Analysts suggest the launch reflects competition pressures within China’s AI industry. The rise of DeepSeek has created turbulence among domestic and global AI companies.
Qwen 2.5 vs. DeepSeek-V3 and Other Models
Alibaba’s cloud division claimed Qwen 2.5 outperformed OpenAI’s GPT-4o, DeepSeek-V3, and Meta’s Llama-3.1-405B. The company made this statement through an official WeChat post. The release follows DeepSeek’s sudden rise, which has shaken both Chinese and U.S. tech industries. Alibaba is striving to maintain dominance in China’s AI race.
DeepSeek’s Rapid Growth Pressures AI Giants
DeepSeek’s recent AI releases, including DeepSeek-V3 and DeepSeek-R1, have disrupted the industry. The January 10 and January 20 launches surprised Silicon Valley and Chinese firms alike. Analysts say DeepSeek’s lower costs are raising concerns for U.S. tech firms. Investors now question whether massive AI spending by U.S. firms remains sustainable.
ByteDance and Other Rivals Enter the AI Race
Chinese companies are responding swiftly to DeepSeek’s advancements. ByteDance recently updated its AI model, claiming better performance than OpenAI’s O1 on AIME benchmarks. This echoed DeepSeek’s assertion that R1 competes with OpenAI’s O1 across various benchmarks. The competition is fueling rapid AI advancements among China’s biggest tech firms.
DeepSeek’s Disruptive Pricing Strategy
DeepSeek-V2 sparked an AI pricing war when released in May. The model’s open-source nature and low cost—just one yuan per million tokens—shocked the market. Alibaba reacted by slashing AI model prices by up to 97%. Baidu and Tencent also introduced significant price reductions to compete.
DeepSeek’s Founder and Unique Business Approach
DeepSeek’s mysterious founder, Liang Wenfeng, rarely speaks to the media. In July, he told Chinese outlet Waves that DeepSeek prioritizes AGI (artificial general intelligence) over price wars. OpenAI defines AGI as machines surpassing human performance in key economic tasks. Liang believes AI innovation requires a lean, flexible business model.
DeepSeek’s Lean Operation vs. Industry Giants
Unlike massive corporations like Alibaba and Tencent, DeepSeek functions like a research lab. The company employs young graduates and PhDs from China’s top universities. Liang suggests large firms are not suited to AI’s future due to high costs and rigid structures. DeepSeek embraces a loose, innovation-driven management style.
Future of AI Competition in China and Beyond
The ongoing AI competition is shaping the industry’s future. Alibaba, ByteDance, Baidu, and Tencent are aggressively innovating in response to DeepSeek. The impact extends beyond China, influencing global AI advancements. As companies race toward AGI, competition will likely intensify even further.
