<div id="readability-page-1">Shares of Alibaba Group Holding (BABA 1.96%) were flying higher on Wednesday. The company's stock gained 1.9% as of 1:50 p.m. ET, but rose as much as 5.5% earlier in the day. The move up comes as the S&amp;P 500 (^GSPC -0.82%)and Nasdaq Composite (^IXIC -1.11%) lost 0.6% and 0.9%, respectively. Just days after the market punished AI stocks upon the release of the Chinese artificial intelligence chatbot DeepSeek, Alibaba released the latest version of its Qwen AI model. <h2>DeepSeek makes a splash</h2> News of DeepSeek shocked the market, sending shares of U.S. AI stocks lower Monday. Although there has been some recovery, fears remain, given just how efficient DeepSeek is compared to its U.S. counterparts. The team behind the Chinese model claims it was trained for a small fraction of the price, and with inferior chips due to U.S. export restrictions. <h2>Alibaba doesn't want to be left behind</h2> Alibaba released the latest version of its AI model, Qwen 2.5-Max, on Wednesday. The company claims its latest version is more powerful than DeepSeek's. Interestingly, however, the claim is that it is more powerful than DeepSeek-V3, not R1, the latest and most powerful version that shocked Silicon Valley. It appears that DeepSeek still has the edge. Regardless, it was enough for Alibaba's stock to see a boost. Alibaba and other Chinese AI companies are still on their heels, playing catch-up to DeepSeek. After the latter released its V2 model, Alibaba cut prices up to 97% on its offerings. The company has its work cut out for it to keep pace with its upstart rival. </div>

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Shares of Alibaba Group Holding surged by 1.9% on Wednesday, peaking at 5.5% earlier in the day, despite declines in the S&P 500 and Nasdaq. This increase follows the release of Alibaba's Qwen 2.5-Max AI model, which the company claims is more powerful than the Chinese AI chatbot DeepSeek's V3 version. However, DeepSeek remains a strong competitor, prompting Alibaba to significantly reduce prices on its offerings to remain competitive in the AI market.

- Alibaba Group Holding's shares rose by 1.9% on Wednesday, despite declines in the S&P 500 and Nasdaq Composite.  
- This increase follows the release of Alibaba's Qwen 2.5-Max AI model, which the company claims is more powerful than the DeepSeek-V3 model, although DeepSeek remains ahead overall.  
- Alibaba is under pressure to compete with DeepSeek, having previously reduced prices by up to 97% to keep up with the competition in the AI sector.

Why Alibaba Stock Is Surging Today