Investing.com-- Alibaba’s Hong Kong shares rose sharply on Thursday, leading a rally in their Chinese peers after the e-commerce giant released a new open source artificial intelligence model that rivaled DeepSeek.
Alibaba (NYSE:BABA)(HK:9988) surged 7.3% to HK$139.60 and was in sight of highs last seen in late-2021. The stock was the biggest boost to Hong Kong’s Hang Seng index, which jumped over 1%.
Alibaba on Thursday open-sourced its recently unveiled QwQ-32B AI model- which the company claims rivals DeepSeek R1 in performance while using a fraction of the latter’s data requirements.
The model was released by Alibaba’s Qwen division, which is developing the company’s most advanced reasoning AI models.
QwQ- short for Quan-with-Questions- was first released in November 2024 to compete with OpenAI’s o1 reasoning AI model.
But the model sat in relative obscurity until the release of DeepSeek R1 earlier this year, which shone a renewed light on China’s AI efforts.
Alibaba is at the forefront of these efforts, with its new QwQ model aimed largely at competing with DeepSeek. Early testing of the model showed that it was capable of matching, or even surpassing DeepSeek’s reasoning capabilities, while using a fraction of the latter’s data requirements.
Alibaba leads China tech rally amid stimulus cheer
Alibaba was at the forefront of a rally in Chinese tech stocks, as investors also cheered recent stimulus measures from Beijing. Major internet peers Baidu Inc (HK:9888) (NASDAQ:BIDU) and Tencent Holdings Ltd (HK:0700) soared 3.8% and 5.5%, respectively, on Thursday.
Other tech and AI-related stocks also soared, with Kingdee International Software (ETR:SOWGn) Group Co Ltd (HK:0268) up 20%, Meitu Inc (HK:1357) up 12%, while Kingsoft Corp Ltd (HK:3888) added 6.5%. Alibaba ecommerce rival JD.com (HK:9618) added 3.8% before its quarterly results, which are due later in the day.
China said it will unlock even more stimulus in the coming months, including continued subsidies for electronics purchases and more measures aimed at boosting personal consumption.
Chinese stocks, particularly large tech names in Hong Kong, have been on a tear since late-January, with the release of DeepSeek. The AI model disrupted U.S. markets and sparked increased bets that China was still in the AI race.
A host of Chinese tech majors have rushed to release similar or competitive offerings in the wake of DeepSeek’s release, with Alibaba at the forefront of this rush.