Chinese tech giant Alibaba has launched a new version of its artificial intelligence model, Qwen 2.5-Max, claiming it outperforms DeepSeek-V3—a rising competitor in China’s AI landscape.

The unusual timing of the release, on the first day of the Lunar New Year, highlights the growing competition in China’s AI sector. DeepSeek’s sudden ascent over the past three weeks has intensified pressure not just on global rivals but also on domestic AI leaders like Alibaba.

Alibaba’s cloud unit stated on WeChat that “Qwen 2.5-Max outperforms … almost across the board GPT-4o, DeepSeek-V3, and Llama-3.1-405B.”

DeepSeek’s AI breakthroughs, including the DeepSeek-V3 model (launched Jan. 10) and the R1 model (released Jan. 20), have sent shockwaves through Silicon Valley, causing tech stocks to dip. The startup’s low development and usage costs have raised concerns among investors about the heavy AI spending strategies of leading U.S. firms.