Alibaba introduces Qwen 2.5-Max AI model, claims edge over DeepSeek – Computerworld

DeepSeek’s rapid ascent over the past three weeks has intensified rivalry not only with global players but also among Chinese tech firms.

“The AI model war is no longer just China versus the US – competition within China is also intensifying as companies like DeepSeek, Alibaba, and others innovate and optimize their models to serve a high-scale domestic market,” said Neil Shah, partner and co-founder at Counterpoint Research. “Chinese companies are being pushed to innovate further due to resource constraints, including limited access to the most advanced semiconductors, global-scale data, tools, infrastructure, and audiences.”

The race for frugal AI

The race to develop high-performance, cost-efficient AI models is intensifying, challenging the business strategies and pricing structures of major US hyperscalers and AI firms as they seek to recover billions in investment.

“This gives enterprise buyers and decision-makers more leverage, increasing pricing pressure on AI applications built with more expensive underlying models,” Shah said. “Such breakthroughs will force enterprises to reconsider, or at least rethink, the economics of AI investments and their choice of models and vendors.”