Alibaba’s Stock Skyrockets Amidst Revolutionary AI Tool Launch

(Bloomberg) — Alibaba Group Holding Ltd.’s stock surged the most in weeks after taking the wraps off a model that it claims performs as well as DeepSeek with just a fraction of the data required. China’s e-commerce leader, which in 2025 jumped to the forefront of the domestic AI sector with highly benchmarked models, on Thursday open-sourced the QwQ-32B model. The platform marked a big leap over the previous version using roughly 5% of the parameters, or data units, that DeepSeek’s R1 employs.

Significant Stock Gains for Alibaba

Alibaba’s stock gained as much as 7.5% in Hong Kong, the most intraday in nearly two weeks. The tech company has gone on a tear this year, gaining some $135 billion of market value. Investors have warmed to the company founded by Jack Ma as it stabilizes a business sideswiped by a years-long government crackdown. Its growing prowess in AI and mounting signs of Beijing’s support helped galvanize its comeback.

Positive Drivers for Alibaba’s Growth

“There’s quite a few positive drivers for Alibaba with their open-source reasoning model the latest catalyst,” said Vey-Sern Ling, a managing director at Union Bancaire Privee. “Their core business is improving and clearly will benefit from China’s push to drive consumption. Investors now also recognize the value that AI will bring to their cloud computing business.”

Investment in AI Infrastructure

Alibaba has pledged to invest more than 380 billion yuan ($52 billion) on AI infrastructure such as data centers over the next three years, a major commitment that underscores the e-commerce pioneer’s ambitions of becoming a leader in artificial intelligence. That target marks one of China’s biggest AI infrastructure budgets, underscoring Alibaba’s growing ambitions in the field.

Market Concerns and Future Demand

However, it comes at a time when investors are pondering whether big tech firms are overestimating future demand for AI services, or the capital needed to create them. The launch of the QwQ-32B model is a significant step for Alibaba, positioning it as a formidable player in the AI landscape.

Conclusion: A New Era for Alibaba

As Alibaba continues to innovate and expand its AI capabilities, the stock market’s reaction reflects a renewed confidence in the company’s future. The integration of advanced AI tools is expected to enhance Alibaba’s operational efficiency and customer engagement, further solidifying its position in the competitive e-commerce sector. For more details, you can read the original article here.