BEIJING: Chinese tech giant Alibaba unveiled an updated version of its Qwen 2.5 artificial intelligence model on Wednesday, claiming it outperforms the widely praised DeepSeek-V3.
The release of Qwen 2.5-Max on the first day of the Lunar New Year—a time when most Chinese people are off work and celebrating with their families—highlights the growing pressure from AI startup DeepSeek. Its rapid ascent over the past three weeks has not only challenged international competitors but also intensified competition within China.
The predecessor to DeepSeek’s V3 model, DeepSeek-V2, sparked an AI model price war in China following its launch last May.
Being open-source and significantly cheaper than its competitors—costing just 1 yuan ($0.14) per 1 million tokens, the basic units of data processed by AI—DeepSeek-V2 prompted Alibaba’s cloud division to slash prices by up to 97% across various models.
Other major Chinese tech firms quickly followed suit, including Baidu, which introduced China’s first ChatGPT-equivalent in March 2023, and Tencent, the country’s most valuable internet company.
DeepSeek’s elusive founder, Liang Wenfeng, stated in a rare July interview with Chinese media outlet Waves that the startup was uninterested in price wars, instead focusing on achieving artificial general intelligence (AGI).
OpenAI defines AGI as autonomous systems that surpass human capabilities in most economically valuable tasks.
Unlike large Chinese tech giants such as Alibaba, which employ hundreds of thousands, DeepSeek operates more like a research lab, staffed primarily by young graduates and PhD students from top Chinese universities.
In his interview, Liang suggested that China’s biggest tech firms may struggle in the evolving AI landscape, contrasting their high costs and rigid structures with DeepSeek’s lean, flexible approach.
