Alibaba Group Holding share price surges 7% on unveiling DeepSeek contender
Alibaba Group Holdings saw a 7% increase in shares on March 6 after introducing a new model that matches DeepSeek's performance using significantly less data.
Shares of Alibaba Group Holdings surged 7% on Thursday, March 6 after unveiling a model that the company said performs as well as DeepSeek at just a fraction of the data required.
According to a Bloomberg report, Alibaba, a top Chinese e-commerce company, in 2025 became a key player in China's artificial intelligence (AI) industry by launching its QwQ-32B model, which outperforms the previous version with only 5% of the parameters used by DeepSeek’s R1 model.
Against this backdrop, shares of Alibaba jumped up to 7.5% in Hong Kong trading, marking its biggest intra-day gains in nearly two weeks. So far this year, the company has seen a strong recovery, adding $135 billion to its market capitalization this year, recovering from a lengthy government crackdown.
Investors are optimistic about Alibaba’s AI progress and the increasing support from Beijing.
“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, according to a Bloomberg report. “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.”
Alibaba's AI Plan
The company has committed to investing over 380 billion yuan ($52 billion) in AI infrastructure, such as data centers, over the next three years. This is one of China’s largest AI infrastructure budgets, highlighting Alibaba’s ambition to lead in the field. However, some investors are questioning whether tech companies are overestimating the future demand for AI services and the capital needed to build them.
(With inputs from Bloomberg)
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