This week, the forefront of China’s AI sector has once again advanced with two significant milestones capturing attention. On Thursday, Alibaba unveiled its newest AI reasoning system, QwQ-32B, asserting it surpasses both the economical model of OpenAI and the esteemed DeepSeek-R1 from the local startup, DeepSeek. This revelation underscores China’s expanding proficiency in AI technology, occurring just a day after the launch of Manus, a versatile AI agent adept at executing intricate, multi-phase assignments.
The launch of QwQ-32B by Alibaba created a stir in the market, causing the company’s shares listed in Hong Kong to jump by 8% and elevating the tech-focused Hang Seng China Enterprises Index. This release highlights the dynamic competition within China’s AI industry, driven by corporate funding, governmental backing, and an increasing demand for technological advancements. With the competition between Chinese and Western AI firms heating up, these events reflect the worldwide importance of China’s progressing AI expertise.
Alibaba’s unveiling of QwQ-32B sent ripples through the market, leading to an 8% surge in the company’s Hong Kong-listed shares and boosting the tech-heavy Hang Seng China Enterprises Index. The release underscores the competitive momentum in China’s AI sector, fueled by a mix of corporate investment, government support, and a growing appetite for technological breakthroughs. As the rivalry between Chinese and Western AI companies intensifies, these developments underscore the global significance of China’s evolving AI capabilities.
Alibaba’s latest AI model, QwQ-32B, stands as a direct challenger to prominent reasoning models from both local and global entities. The company emphasized in a statement that the model excels in disciplines like mathematics, programming, and general problem-solving. Alibaba asserts that QwQ-32B competes with DeepSeek’s R1 model while utilizing notably fewer parameters—32 billion as opposed to R1’s 671 billion—suggesting a more streamlined and efficient architecture.
The announcement positions Alibaba at the leading edge of China’s AI competition, especially as it aims to contest the supremacy of OpenAI, the U.S. company renowned for its pioneering language models. QwQ-32B builds upon Alibaba’s earlier AI breakthroughs, such as its ChatGPT-equivalent Tongyi Qianwen, introduced in 2023, and Qwen 2.5 Max, launched earlier this year. The company contends that these developments signify a “qualitative leap” in AI reasoning, establishing it as a strong contender in the international arena.
The announcement places Alibaba at the forefront of China’s AI race, particularly as it seeks to challenge the dominance of OpenAI, the American firm widely known for its groundbreaking language models. QwQ-32B builds on Alibaba’s previous AI innovations, including its ChatGPT-equivalent Tongyi Qianwen, launched in 2023, and Qwen 2.5 Max, released earlier this year. The company asserts that these advancements represent a “qualitative leap” in AI reasoning, positioning it as a formidable player in the global market.
Alibaba’s aggressive push into AI is further reinforced by its commitment to long-term investment. Last week, the company announced plans to allocate 380 billion yuan (approximately $52.4 billion) over the next three years to its AI and cloud computing infrastructure. This investment surpasses the total amount spent by Alibaba in these areas over the past decade, signaling its determination to lead in both innovation and scalability.
Manus: A new frontier for general AI
Adding to the competitive landscape, Chinese company Monica unveiled Manus, a general AI agent designed to handle intricate, multi-step tasks. Unlike traditional chatbots that primarily generate responses or ideas, Manus is capable of delivering tangible results. A promotional video for the agent shows it performing sophisticated tasks such as screening job applications, creating websites, and producing detailed reports based on user-defined criteria.
DeepSeek’s impact on the progression of AI in China
The launch of QwQ-32B and Manus builds on the earlier success of DeepSeek’s R1 model, which this year established a new standard for reasoning models in both performance and cost-effectiveness. In January, DeepSeek drew international focus by demonstrating that R1, with its 671 billion parameters, demanded notably less investment for training than its Western rivals. This accomplishment strengthened faith in the ability of Chinese AI companies to compete internationally, despite the hindrances of geopolitical tensions and trade restrictions.
DeepSeek’s R1 model is celebrated as a significant advancement in reasoning technology, allowing for quick and accurate solutions to intricate problems. Its success has also played a role in changing investor outlook, with the Hang Seng China Enterprises Index climbing more than 30% since January. Analysts interpret this trend as indicative of increasing confidence in China’s capability to innovate and take the lead in new technologies.
DeepSeek’s R1 model has been hailed as a breakthrough in reasoning technology, enabling rapid and precise solutions to complex problems. Its success has also contributed to a broader shift in investor sentiment, with the Hang Seng China Enterprises Index rising by over 30% since January. Analysts view this trend as a reflection of growing optimism about China’s ability to innovate and lead in emerging technologies.
Government backing fuels AI development in China
China’s emphasis on AI development addresses not only internal demands but also serves as a strategic maneuver amidst its ongoing competition with the United States. As both countries vie for technological dominance, China’s AI progress is considered essential for enhancing its standing in the global market. By fostering collaboration between private enterprises and government-supported research entities, the Chinese government seeks to establish a strong ecosystem capable of sustaining long-term growth and innovation.
The future outlook for China’s AI industry
The road ahead for China’s AI sector
Yet, obstacles persist. The escalating competition between Chinese and Western tech giants has resulted in heightened scrutiny and regulatory pressures, especially in the United States and Europe. Concerns about data security, intellectual property, and ethical standards continue to influence the global dialogue on AI, with Chinese companies frequently at the heart of these discussions.
However, challenges remain. The intensifying rivalry between Chinese and Western tech giants has led to increased scrutiny and regulatory pressures, particularly in the United States and Europe. Questions about data security, intellectual property, and ethical standards continue to shape the global conversation around AI, with Chinese firms often finding themselves at the center of these debates.
Despite these obstacles, China’s AI sector shows no signs of slowing down. With strong government support, robust corporate investment, and a growing pool of talent, the country is well-positioned to drive the next wave of AI innovation. As the race for technological leadership heats up, the launches of QwQ-32B and Manus serve as a reminder of the transformative potential of artificial intelligence—and the central role China is playing in shaping its future.
