Alibaba has unveiled its most powerful artificial intelligence model to date, while rival DeepSeek introduced an ultra low cost AI system, highlighting the rapid pace of innovation and growing competition among Chinese technology companies.
Alibaba launched its new Qwen3.8 Max model on Monday, sending the company’s shares up about 7 per cent in Hong Kong trading as the system quickly climbed global AI performance rankings.
The new model features 2.4 trillion parameters, making it one of the largest AI models developed in China. It trails only Moonshot AI’s Kimi K3, which has 2.8 trillion parameters, although experts note that a higher parameter count does not necessarily guarantee better performance.
Alibaba said Qwen3.8 Max is capable of processing text, images and videos while handling up to one million tokens in a single prompt, enabling it to analyse extensive legal documents, software code and other large datasets. The company also said the model completed a software engineering project in just 16 days and uses a mixture of experts architecture that activates only 95 billion parameters at a time, reducing computing costs and improving response speed.
Meanwhile, DeepSeek’s V4 Flash model has emerged as one of the world’s cheapest AI systems to operate. Research firm Artificial Analysis estimated that the model costs about three cents per benchmark test, significantly lower than competing systems such as Kimi K3, OpenAI’s GPT 5.6 Sol, and Anthropic’s Claude Fable 5.
DeepSeek charges 14 cents per million input tokens and 28 cents per million output tokens, making it more than 100 times cheaper than Anthropic’s latest flagship model in some benchmark comparisons.
Industry analysts said the latest releases demonstrate China’s growing focus on open weight AI models, allowing developers to download and customise the underlying model weights rather than relying on closed source platforms.
Lian Jye Su, Chief Analyst at Omdia, said many businesses are increasingly looking for AI models that are affordable, transparent and sufficiently capable rather than the most powerful systems available.
The latest developments underscore the intensifying AI rivalry between Chinese technology firms and leading American companies, with competition increasingly focused on balancing performance with lower operating costs.
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