Alibaba is continuing the AI competition between China and the United States from where DeepSeek left off. The company released an updated version of its AI assistant app. It will use its own Qwen AI reasoning model, the company’s most popular AI model.
Alibaba said that the updated version will have a chatbot, deep thinking, and task execution built into a single app. Before now, Quark, which came out in 2016, used its own AI models, which are called QuarkLLM.
It can handle tasks from image generation to travel planning, similar to what ByteDance’s Doubao can offer to users. The company posted a demonstration video that showed the app writing articles from pictures and generating minutes for meetings.
Wu Jia, CEO of Quark and an Alibaba vice-president said in the statement, “As our model capabilities continue to evolve, we envision Quark as a gateway to endless possibilities where users can explore everything with AI.” New Quark will be available to all users gradually, starting with a pilot launched today.
The start is the latest move by the company to get ahead of the competition in the AI application market, which has become even tougher since DeepSeek’s hugely popular R1 model came out earlier this year.
Alibaba’s strides thus far
The new quark launch comes just a day after Alibaba launched an R1-Omni model that it said can read emotions. The tech giant showed off its newest AI reasoning model, QwQ-32B, last Thursday. It said that it “rivals cutting-edge reasoning models, e.g., DeepSeek-R1.”
Alibaba said last month that it is set to spend between $52.5 billion and $380 billion over the next three years on cloud computing and AI technology. The company said that its Qwen AI had done well in official benchmark tests. This shows that it is becoming more influential in the field.
In addition, Manus AI, made by the Chinese startup Butterfly Effect, announced a relationship with Alibaba on Tuesday. Monica, a Chinese start-up company, made Manus AI, which they call a general AI agent. They say it can do better than OpenAI’s DeepResearch AI agent.
According to experts, Alibaba’s AI cloud business has been making “significant strides.” The cloud intelligence unit and e-commerce section helped the company make a lot more money in the December quarter.
The company reported that its net income for the quarter ending December 31 was 48.945 billion yuan ($6.72 billion). This was more than three times higher than the 14.4 billion yuan it made during the same time last year and higher than what LSEG had predicted, which was 40.6 billion yuan.
Analysts had predicted that Alibaba would make 279.34 billion yuan in sales, but they actually made 280.15 billion yuan.
Also, Alibaba got a big deal with Apple Inc. earlier this year to work together on AI for iPhones. Now, they want to go up against OpenAI. Meanwhile, Alibaba shares in Hong Kong fell 2.45% to 131.5 Hong Kong dollars ($16.9).
Is China AI still riding on DeepSeek’s moment?
The Hang Seng Tech Index has increased by 28.5% since DeepSeek released its R1 model on January 20 and 20.5% as of March 5.
In the past few weeks, a number of Chinese tech companies have said they will be using DeepSeek’s AI model. This caused a stock market rise that sent Hong Kong-listed tech giants skyrocketing.
Tencent’s stock went up more than 33%, and Alibaba’s stock went up over 60%. Both of these companies’ stocks hit their best levels in almost three years. Kuaishou’s stock went up more than 28%, and Bilibili’s stock went up more than 24%.
At the same time, global financial banks like Deutsche Bank, Goldman Sachs, and Morgan Stanley are becoming more optimistic about Chinese assets. Goldman Sachs kept its “overweight” rating on A-shares and Hong Kong stocks. Morgan Stanley said that investors around the world are now re-evaluating China’s AI and tech prospects.
Deutsche Bank, on the other hand, was the bravest. The bank said that DeepSeek’s rise was like China’s “Sputnik moment” and that investors would rethink how competitive Chinese businesses were.
The company thought that the decline in the value of Chinese stocks would soon be fixed. This would cause a long-lasting bull market in A-shares and Hong Kong stocks, which would reach new highs by the middle of the year.
Now the question is: what is it about DeepSeek that has caused such a change in how foreign investors feel? Are the stock market gains after the holidays in A-shares and Hong Kong stocks fair? The more important question is how long this DeepSeek-fueled rise can last.
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