Alibaba Introduces a New AI Model and Says It Beats DeepSeek and GPT-4o
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According to a news agency, Chinese internet giant Alibaba on 29 January unveiled an updated version of its Qwen 2.5 artificial intelligence model, which it said outperformed the much-lauded DeepSeek-V3. The Qwen 2.5-Max's odd release date—the first day of the Lunar New Year, when the majority of Chinese are off from work and spending time with their families—indicates how much pressure DeepSeek's explosive growth over the last three weeks has put on both its domestic and international competitors.
Alibaba's cloud unit released a statement on its official WeChat account stating that "Qwen 2.5-Max outperforms... almost across the board GPT-4o, DeepSeek-V3, and Llama-3.1-405B," alluding to the most cutting-edge open-source AI models from OpenAI and Meta. Alibaba has invested heavily in its cloud services division with Tencent Holdings Ltd. and Baidu Inc., and it is in a fierce competition to hire Chinese AI developers to utilise its tools.
Locking Horns with Set Players
This week, the 20-month-old startup DeepSeek, which was established in Hangzhou, Alibaba's hometown, rocked US tech companies. Alibaba Cloud also disclosed results indicating that, in some benchmarks, its AI outperforms OpenAI's and Anthropic's models.
In an effort to attract more customers, cloud service providers like Tencent and Alibaba have recently lowered their prices. Along with six other promising AI businesses in China that have raised money at unicorn values, DeepSeek has already participated in that pricing war.
Comparing DeepSeek with Domestic Rivals
When DeepSeek's V3 model's predecessor, DeepSeek-V2, came out in May of last year, it set off a pricing war for AI models in China. Alibaba's cloud division announced price reductions of up to 97% on a variety of models due to DeepSeek-V2's open-source nature and historically low cost of just 1 yuan ($0.14) for 1 million tokens, or units of data processed by the AI model.
Other Chinese tech giants followed suit, such as Tencent, the most valuable internet company in the nation, and Baidu (9888.HK), which launched China's first ChatGPT-like app in March 2023. In a rare interview with Chinese media site Waves in July, Liang Wenfeng, the mysterious creator of DeepSeek, stated that the company "did not care" about price wars and that its primary objective was to achieve artificial general intelligence, or AGI.
AGI is defined by OpenAI as autonomous systems that outperform humans in the majority of economically significant tasks. Young graduates and PhD students from prestigious Chinese universities make up the majority of DeepSeek's workforce, which functions more like a research lab than the hundreds of thousands of workers employed by major Chinese internet businesses like Alibaba.
Liang contrasted DeepSeek's lean operations and flexible management style with the exorbitant costs and top-down structures of China's major tech companies, saying in his July interview that he thought they might not be well suited to the future of the AI business. Liang went on to say that IT giants' skills have their limits and that large foundational models require ongoing innovation.
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