Alibaba’s new AI model creates bubble in China’s stock market
HANGZHOU, CHINA — China has recently demonstrated new advanced artificial intelligence (AI) tools that have sparked a stock market rally. The company that leads the gains is Alibaba Group Holding Ltd., which unveiled its latest open-sourced AI model. This has boosted the Hang Seng Tech index by 5.4%, a gain that takes it to its highest close since 2021.
Alibaba among companies that performed well
Alibaba has recently revealed its latest AI technology, QwQ-32B, which is reportedly better than its predecessors in the sense that it requires less data than DeepSeek’s R1 model. The company’s new AI model is productized for being more efficient with 32 billion parameters that are used in production of accurate predictions and generation of meaningful output. This announcement as well pushed the price of Alibaba stock in Hong Kong up by 8.4%.
Kuaishou Technology also rose sharply, with shares rising 16%, the most in over two years. Meanwhile, Focus Technology Co. hit its daily gain limit of 10%.
Supportive policies key to innovation
China’s plans to support the development of AI technologies were outlined at the National People’s Congress. This has helped to revive the interest of investors in companies like Alibaba, which has gained $153 billion in market value since January.
“The supportive rhetoric to AI announced at the NPC sets a proper context for Chinese AI innovation to move forward,” said Linda Lam, head of equity advisory North Asia at Union Bancaire Privee.
“Looking ahead, we expect a proliferation of open-source AI applications from China and the US, to propel the tech rally globally.”
Investments and innovations in AI
Alibaba has announced that it will be spending more than $52 billion in AI infrastructure over the next three years, which shows that it is looking to be one of the big players in AI.
Tencent also introduced its open-source video model Hunyuan and Kuaishou Technology also launched a similar product.
Manus AI revealed a general AI agent that beat OpenAI‘s Deep Research on some tasks based on the GAIA (General AI Assistants) benchmark. The GAIA benchmark is a new standard for evaluating an AI model’s fitness for real-world tasks.
The developments in AI and the enabling government policies are expected to not only enhance the tech sector but also have a potential to shape the global markets, with China as the new AI power.
