Tech Desk 
Jan 29, 2025
In a bid to counter the globally acclaimed DeepSeek-V3, a new generative artificial intelligence (GenAI) model developed by Chinese startup DeepSeek, Alibaba on Wednesday released an updated iteration of its Qwen 2.5 AI model, which it claimed is better than GPT-4o, DeepSeek-V3 and Llama-3.1-405B.
What makes Alibaba's hop onto the AI space, which was taken by storm since the inception of DeepSeek's AI chatbot, unique is the odd timing which coincides with the first day of the Lunar New Year, an occasion when China observes the holiday as part of the Spring Festival.
The skyrocketing popularity of DeepSeek's AI model reportedly exerted significant pressure not only on global tech giants but also on tech firms with enormous local footprint within China, as reported by Reuters.
“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 made on its official WeChat handle, directly pointing to OpenAI and Meta’s top-of-the-line open-source AI models.
Following the rollout of DeepSeek's standard AI assistant on January 10, the subsequent release of DeepSeek R1 (an even more advanced version powered by DeepSeek-V3) dragged Silicon Valley down on its knees, shedding a huge portion of tech shares around the world.
Largest among tech firms witnessing heavy selloff was Nvidia Corp, which lost around $590 billion on Monday after the Chinese AI model outperformed OpenAI's ChatGPT on the App Store and became the top-rated app on the app marketplace.
What further aggravated the steep fall of US-based technology shares was a mere $6 million cost born by the Chinese startup for the development of a world-class AI chatbot, causing the biggest investors of US tech titans to question billion-dollar projects churned out by AI bellwethers in the country.
