BEIJING (Reuters) - The Hong Kong-listed shares of Alibaba Group ( BABA ) surged more than 8% on Thursday following the release of a new reasoning model that the company said was on par with global hit DeepSeek's R1.

Qwen, the e-commerce leader's artificial intelligence unit, said on X that its QwQ-32B, with 32 billion parameters, can achieve performance comparable to DeepSeek's R1 model, which boasts 671 billion parameters.

The announcement came a day after the Chinese government pledged increased support for industries including artificial intelligence, humanoid robots and 6G telecom, as AI models see increasing adoption by government agencies and smaller companies in China.

Alibaba ( BABA ) said the new model is accessible via its chatbot service, Qwen Chat, for which users can choose various Qwen models including Qwen2.5-Max, the most powerful language model in the Qwen series.

The firm said the QwQ-32B demonstrated capabilities in mathematical reasoning, coding and general problem-solving in benchmark tests, performing close to top models such as OpenAI's o1 mini and DeepSeek's R1.

DeepSeek has emerged as the new poster child of China's AI prowess, rivaling top models from OpenAI for a fraction of its costs with less powerful computing.

Analysts said initiatives laid out by the government will expand usage of AI in China.

"China is rapidly building an application-driven AI ecosystem that isn't just about research - it's about immediate, tangible economic impact," said Sun Wei, principal AI analyst at research company Counterpoint.

Alibaba's ( BABA ) shares surged 8% to HK$140.5 a share.

(Reporting by Che Pan and Brenda Goh; Editing by Mrigank Dhaniwala)