Shares of Alibaba Group surged over 8% on March 6, 2025, following the announcement of its new artificial intelligence reasoning model, QwQ-32B. This model, developed by Alibaba's AI division Qwen, boasts 32 billion parameters and claims to rival the performance of DeepSeek's R1 model, which contains 671 billion parameters. The launch comes at a time when the Chinese government is increasing its support for AI technologies, humanoid robotics, and advanced telecommunications. This governmental backing is expected to bolster the adoption of AI across various sectors in China, enhancing investor confidence in Alibaba's latest innovation.

The QwQ-32B model is accessible through Alibaba's chatbot service, Qwen Chat, where users can choose from a variety of models tailored to different needs. In benchmark evaluations, QwQ-32B demonstrated strong capabilities in mathematical reasoning, programming, and general problem-solving. The model's performance has been reported as comparable to leading models like OpenAI's o1 mini and DeepSeek's R1. This achievement highlights Alibaba's commitment to advancing AI technology while maintaining a focus on efficiency and cost-effectiveness.

Analysts have noted that the Chinese government's initiatives are likely to expand the application of AI technology throughout the country. Sun Wei, a principal AI analyst at Counterpoint, remarked that China is rapidly constructing an AI ecosystem that emphasizes practical applications with immediate economic benefits rather than solely focusing on research. This shift in strategy aligns with Alibaba's efforts to innovate within the competitive landscape of AI development, positioning itself as a key player against both domestic and international rivals.

Following the announcement of QwQ-32B, Alibaba's stock rose to HK$140.5 per share. This increase reflects not only investor optimism about the new AI model but also broader trends in the Chinese tech market. Year-to-date, Alibaba's shares have surged nearly 71%, indicating strong market confidence amid a growing demand for advanced AI solutions. As competition intensifies among tech giants like OpenAI and DeepSeek, Alibaba's advancements in AI reasoning models will likely play a crucial role in shaping its future growth trajectory and market position.