• Alibaba has released Qwen 2.5-Max, an AI model it claims surpasses DeepSeek-V3, GPT-4o, and Llama-3.1-405B. The launch coincided with the Lunar New Year, signaling Alibaba’s response to DeepSeek’s rapid rise.
  • DeepSeek’s AI models have disrupted the industry with low pricing, prompting a price war in China. DeepSeek-V2, released in May 2023, offered AI services for just 1 yuan ($0.14) per million tokens, forcing Alibaba, Baidu, and Tencent to slash prices.

Chinese tech giant Alibaba (9988.HK) has launched Qwen 2.5-Max, the latest version of its artificial intelligence model, claiming it outperforms the highly acclaimed DeepSeek-V3.

The release, which coincided with the first day of the Lunar New Year, highlights the growing competition among China’s AI developers, particularly in response to the rapid rise of DeepSeek over the past three weeks.

"Qwen 2.5-Max outperforms ... almost across the board GPT-4o, DeepSeek-V3 and Llama-3.1-405B,"

Alibaba’s cloud unit announced on its official WeChat account, referencing OpenAI and Meta’s most advanced AI models.

DeepSeek has made waves in the global AI landscape with the launch of its DeepSeek-V3 model on January 10, followed by the R1 model on January 20. The startup’s disruptive pricing and efficiency have put pressure on U.S. tech firms, leading to a drop in tech stock prices and raising questions about the high development costs of AI models in the West.

DeepSeek’s success has also intensified domestic competition. On January 22, ByteDance updated its flagship AI model, claiming it surpassed OpenAI’s o1 on AIME, a benchmark for complex instruction comprehension. This followed DeepSeek’s assertion that its R1 model rivaled OpenAI’s o1 in performance.

DeepSeek’s V2 model, launched in May 2023, triggered a price war in China by offering AI services at just 1 yuan ($0.14) per million tokens. In response, Alibaba slashed its AI model prices by up to 97%, with other Chinese tech giants, including Baidu and Tencent, following suit.

DeepSeek founder Liang Wenfeng has downplayed price wars, emphasizing the company’s focus on achieving AGI. He has also suggested that large tech firms may struggle to keep up with AI’s evolving demands due to their rigid structures and high costs.

Edited by Harshajit Sarmah