Chinese technology company Alibaba Group Holding Ltd (阿里巴巴) yesterday released a new version of its Qwen 2.5 artificial intelligence (AI) model that it said surpassed the highly acclaimed DeepSeek-V3.
The unusual timing of the Qwen 2.5-Max’s release, on the first day of the Lunar New Year when most Chinese people are off work and with their families, points to the pressure Chinese AI start-up DeepSeek’s (深度求索) meteoric rise in the past three weeks has placed on not just overseas rivals, but also its domestic competition.
“Qwen 2.5-Max outperforms ... almost across the board GPT-4o, DeepSeek-V3 and Llama-3.1-405B,” Alibaba’s cloud unit said in an announcement posted on its official WeChat account, referring to OpenAI and Meta Platforms Inc’s most advanced open-source AI models.
Photo: Bloomberg
The Jan. 10 release of DeepSeek’s AI assistant, powered by the DeepSeek-V3 model, as well as the Jan. 20 release of its R1 model, has shocked Silicon Valley and caused tech shares to plunge, with the Chinese start-up’s purportedly low development and usage costs prompting investors to question huge spending plans by leading AI firms in the US.
However, DeepSeek’s success has also led to a scramble among its domestic competitors to upgrade their own AI models.
Two days after the release of DeepSeek-R1, TikTok owner ByteDance Ltd (字節跳動) released an update to its flagship AI model, which it said outperformed Microsoft Corp-backed OpenAI’s o1 in AIME, a benchmark test that measures how well AI models understand and respond to complex instructions.
This echoed DeepSeek’s claim that its R1 model rivaled OpenAI’s o1 on several performance benchmarks.
The predecessor of DeepSeek’s V3 model, DeepSeek-V2, triggered an AI model price war in China after it was released in May last year.
The fact that DeepSeek-V2 was open-source and unprecedentedly cheap, only 1 yuan (US$0.14) per 1 million tokens — or units of data processed by the AI model — led to Alibaba’s cloud unit announcing price cuts of up to 97 percent on a range of models.
Other Chinese tech companies followed suit, including Baidu Inc (百度), which released China’s first equivalent to ChatGPT in March 2023, and the country’s most valuable Internet company, Tencent Holdings Ltd (騰訊).
Liang Wenfeng (梁文鋒), DeepSeek’s enigmatic founder, said in a rare interview with Chinese media outlet Waves in July last year that the start-up “did not care” about price wars and that achieving AGI (artificial general intelligence) was its main goal.
OpenAI defines AGI as autonomous systems that surpass humans in most economically valuable tasks.
Liang said he believed China’s largest tech companies might not be well suited to the future of the AI industry, contrasting their high costs and top-down structures with DeepSeek’s lean operation and loose management style.
“Large foundational models require continued innovation, tech giants’ capabilities have their limits,” he said.
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