Move over, DeepSeek: There’s a new chatbot in town.
Chinese tech conglomerate Alibaba just unveiled an artificial intelligence reasoning model named QwQ-32B, which the company claims can achieve comparable results with DeepSeek-R1 while using less computational power.
Although we wish China’s latest AI breakthrough had a shorter, more pronounceable name, the news has sent Alibaba shares soaring. In Hong Kong, the stock closed Thursday 8.39% higher, while shares in New York remained flat.
QwQ-32B may be China’s newest, shiniest chatbot on the block, but it’s hardly the only contender. Tencent’s AI assistant Yuanbao, for instance, has already left DeepSeek in the dust as the country’s most-downloaded iPhone app. Meanwhile, a Chinese startup debuted an AI taskbot named Manus that’s been hailed for its ability to complete complex requests, from building custom websites to planning an itinerary for your next vacation.
All of which sounds great…but where does this leave the US?
The race is far from over
This explosion of Chinese AI innovations has fueled worries about whether US tech firms are keeping their foot on the gas. Those fears were only exacerbated by Marvell Technology’s latest lackluster earnings report, which not only caused its shares to plummet 19.81%, but also sparked concerns over widespread weakness in America’s tech dominace—at the exact same time that tariffs are threatening tech companies’ bottom lines.
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But even though China’s AI seems to be outshining the US of late, this doesn’t mean American companies are just loafing around. In fact, some of the biggest are going full steam ahead on AI.
On Wednesday, both Meta and Amazon announced plans to create software for artificial intelligence agents, which are defined by their skill for executing multi-step tasks versus simply responding to questions or prompts.
All of this drives home that the AI race is more of a marathon than a sprint—China may seem to be at the forefront right now, but it’s still too early to tell who will win.
“Investors should ignore the herd mentality associated with any recent news about Marvell or Alibaba. The biggest mistake investors will make is focusing on the news of the day,” says Dave Nicholson, chief research officer at tech firm Futurum. Instead, he believes investors can benefit from diversifying their AI investments. “The monster margins that Nvidia enjoys today will naturally slosh around into the pockets of competitors as time goes by and the market for all things AI continues to grow.”
Who knows? Maybe both China and the US can have some winners in the AI race.—JD