Alibaba introduces a new competitor to DeepSeek, named QwQ-32B.

Alibaba's shares experienced a notable increase of over seven percent during Thursday's trading session in Hong Kong, following the announcement of an artificial intelligence model that the company claims can rival DeepSeek, a standout in the tech sector this year.

Since January, investors have shown optimism regarding China's advancements in AI, particularly after DeepSeek introduced a cutting-edge chatbot that operates at a significantly lower cost than what Western industry leaders had anticipated.

The newly unveiled AI model by Alibaba, named QwQ-32B, reportedly delivers performance on par with DeepSeek while requiring considerably less data for operation.

Before a midday trading halt at the Hong Kong Stock Exchange, shares of the e-commerce giant surged by more than seven percent.

China's expansive technology sector has seen a resurgence in market confidence over the past few weeks.

Last month, Alibaba co-founder Jack Ma was spotted engaging with Chinese President Xi Jinping at a symposium attended by prominent business leaders, marking his return to the public eye after a prolonged absence.

Ma had previously voiced concerns regarding government regulations in late 2020, shortly before Beijing halted Alibaba's highly anticipated IPO.

The subsequent regulatory crackdown resulted in a loss exceeding one trillion dollars in value for major Chinese tech companies.

However, Ma's participation in last month's meeting suggests a potential reconciliation with regulators.

The emergence of DeepSeek this year has been welcomed by authorities, who have intensified efforts to stimulate economic activity in the world's second-largest economy.

Alibaba's QwQ-32B now enters a competitive landscape alongside Tencent's Yuanbao, intensifying the domestic rivalry with DeepSeek.

In a possible advantage for the company, Beijing announced on Wednesday its commitment to increase support for consumer spending, which has experienced a downturn in China since the onset of the Covid-19 pandemic.

Alibaba, headquartered in Hangzhou and managing several of China's leading online shopping platforms, revealed last month its intention to invest over $50 billion in artificial intelligence and cloud computing over the forthcoming three years.