Alibaba Unveils New AI Model, Claiming It’s Superior to DeepSeek and OpenAI

DeepSeek’s emergence has led to a wave of rapid AI model upgrades by competitors in China.

Chinese tech giant Alibaba (9988.HK) has unveiled Qwen 2.5-Max, the latest iteration of its artificial intelligence model, claiming it outperforms leading AI systems, including DeepSeek-V3, OpenAI’s GPT-4o, and Meta’s Llama-3.1-405B. The release, announced on Alibaba Cloud’s official WeChat account, comes amid a fiercely competitive AI landscape in China, where DeepSeek’s rapid rise has intensified the race for AI supremacy.

The timing of the launch, on the first day of the Lunar New Year—a time when most Chinese workers are on holiday—highlights the urgency Alibaba faces as DeepSeek’s breakthroughs shake up both domestic and international AI markets. The startup’s DeepSeek-V3 model, launched on Jan. 10, and its subsequent R1 model, released on Jan. 20, have drawn global attention for their impressive performance and low operating costs, triggering a reassessment of investment strategies among major AI firms in the U.S.

DeepSeek’s emergence has led to a wave of rapid AI model upgrades by competitors in China. Just two days after DeepSeek-R1’s debut, ByteDance, the owner of TikTok, updated its flagship AI model, asserting that it had surpassed Microsoft-backed OpenAI’s o1 model in AIME, a benchmark for complex instruction comprehension. This mirrored DeepSeek’s claims that its R1 model rivals OpenAI’s o1 in several key performance metrics.

DeepSeek’s Disruptive Impact on China’s AI Market

DeepSeek’s influence on China’s AI ecosystem dates back to the release of its DeepSeek-V2 model in May 2023, which sparked an AI pricing war. Unlike previous high-cost AI models, DeepSeek-V2 was open-source and offered at an unprecedentedly low price of just 1 yuan ($0.14) per million tokens. In response, Alibaba’s cloud division slashed AI model prices by up to 97%, forcing competitors such as Baidu and Tencent to follow suit.

Despite the price war, DeepSeek’s founder Liang Wenfeng has maintained that cost reduction is not the company’s primary concern. In a rare interview with Waves, a Chinese media outlet, Liang stated that DeepSeek’s ultimate goal is to achieve artificial general intelligence (AGI), an AI capability that surpasses humans in most economically valuable tasks. Unlike China’s established tech giants, which employ hundreds of thousands of workers, DeepSeek operates more like a research lab, with a lean team of young graduates and Ph.D. students from top Chinese universities.

Liang has suggested that large tech firms may struggle to adapt to the AI industry’s future demands. He contrasted their hierarchical structures and high operating costs with DeepSeek’s flexible and innovation-driven approach, noting that “large foundational models require continued innovation, and tech giants’ capabilities have their limits.”

The Connection Between AI and Bitcoin Mining

While competition in AI development intensifies, parallels can be drawn between the AI industry’s rapid evolution and the dynamics of Bitcoin mining. Bitcoin mining, a process in which miners solve complex mathematical puzzles to validate transactions and secure the blockchain, relies on high-performance computing (HPC). As demand for computational power grows, many Bitcoin mining firms have begun repurposing their infrastructure for AI workloads.

Bitcoin’s network security is measured by its hash rate, which represents the total computational power used for mining. A higher hash rate indicates increased network security and mining difficulty. The AI boom has led to a surge in demand for advanced GPUs and data centers, similar to those used in Bitcoin mining, driving a convergence between the two industries. Companies like Hive Digital Technologies have already expanded their focus from Bitcoin mining to AI computing, demonstrating the increasing overlap between blockchain technology and artificial intelligence.

The rise of AI firms like DeepSeek mirrors the decentralization seen in Bitcoin mining. Just as smaller mining operations have challenged large-scale enterprises by leveraging efficient, lower-cost models, AI startups are disrupting industry giants by introducing more agile and cost-effective innovations. Both sectors rely on computational power, and as AI models grow more sophisticated, their need for energy-intensive hardware could further intertwine the fates of Bitcoin mining and AI development.

The Future of AI and High-Performance Computing

With Alibaba, DeepSeek, ByteDance, and other major players rapidly advancing their AI capabilities, the competition for dominance in China’s AI sector is expected to intensify. The integration of AI with Bitcoin mining infrastructure could further reshape the computing landscape, potentially creating new opportunities for businesses operating in both industries.

As China’s AI race accelerates, companies that successfully balance innovation, cost efficiency, and computational power will likely emerge as leaders in the global AI revolution. Whether DeepSeek’s lean model proves superior to Alibaba’s vast resources remains to be seen, but one thing is clear: the battle for AI supremacy in China is far from over.