Another Chinese AI Company Says It's Beaten OpenAI

Another one.

Deep Burning

Major Chinese tech company Alibaba claims that the latest version of its Qwen AI model has beaten out DeepSeek's V3, the model that flipped Silicon Valley on its head earlier this week by edging out OpenAI.

In a statement posted to the Chinese social media platform WeChat, Alibaba said that its Qwen 2.5-Max "demonstrated world-leading model performance in mainstream authoritative benchmarks" and "comprehensively surpasses" OpenAI's GPT-4o, Anthropic's Claude 3.5 Sonnet, and Meta's Llama 3.1.

If confirmed, the claim could mark yet another escalation in the race to develop higher performance and more cost-efficient AI models among Chinese competitors, which have thrown Western tech markets into chaos.

The news comes after DeepSeek, which was founded in Alibaba's home city of Hangzhou, similarly claimed that it'd figured out how to achieve similar or even better performance than OpenAI's cutting-edge models at a tiny fraction of the cost. The announcement led to a massive scramble, wiping out over $1 trillion worth of market capitalization in former AI frontrunners.

Now, Alibaba — which has far more resources at its disposal than DeepSeek — has entered the ring, sending even more shockwaves across markets. Alibaba's shares surged nearly two percent following its announcement.

Crowding Markets

In tandem, AI chipmaker Nvidia also slid around five percent Wednesday morning, though whether the drop was in response to Alibaba's unveiling, high-end GPU shortages, or a mix of both, remains unclear.

Nvidia was already feeling the hurt, having set a new record for the biggest single-day loss of any company in history.

As Reuters points out, it's not just Alibaba and DeepSeek. TikTok owner ByteDance, also based in China, also showed off a new version of its flagship AI model last week that reportedly outperforms OpenAI's o1 AI model in certain benchmarks.

As Bloomberg reports, around half a dozen other Chinese AI startups with unicorn valuations are waiting in the wings, hinting at an imminent price war as US-based companies race to compete.

More on DeepSeek: OpenAI Says DeepSeek Used Its Work Without Permission to Create an AI That's Stealing Its Job