Alibaba Group ( BABA ) shares are trading higher on Thursday as the company's latest artificial intelligence model, Qwen 2.5, gained traction.

What To Know: DeepSeek, which had positioned itself as a competitor to OpenAI, saw its momentum weaken this week, with investors questioning whether its aggressive cost-cutting strategy and rapid development cycle were sustainable. The selloff has led traders to reassess the broader AI landscape, with Alibaba ( BABA ) emerging as a beneficiary after unveiling Qwen 2.5-Max, an AI model the company claims has outperformed DeepSeek-V3 in multiple benchmarks.

Qwen 2.5 is Alibaba's ( BABA ) latest iteration in its AI development efforts, built as a mixture of expert (MoE) models designed to enhance efficiency and performance. The Qwen 2.5-Max variant has been benchmarked against top-tier models, outperforming DeepSeek V3 in tests such as Arena Hard, LiveBench, LiveCodeBench and GPQA-Diamond. Alibaba ( BABA ) has also made adjustments to its API pricing, with input tokens priced at $1.6 per million and output tokens at $6.4 per million, aiming to attract broader adoption.

The timing of Alibaba's ( BABA ) AI release, coinciding with the Lunar New Year holiday, underscored the pressure on Chinese tech firms to keep up with AI advancements. Qwen 2.5's improved pricing structure and reported performance advantages may have drawn attention, helping BABA shares defy broader weakness in Chinese equities.

BABA Price Action: Alibaba ( BABA ) shares were up 6.43% at $102.94 at the time of writing, according to Benzinga Pro.

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