China’s New AI Tools Ignite Stock Market Frenzy as Alibaba Soars

Charlotte Yang and Luz Ding

Thu, Mar 6, 2025, 12:27 AM 4 min read

(Bloomberg) -- A pair of new artificial intelligence tools from China sparked frenzied trading in the nation’s stock market, propelling an index of technology companies to a multi-year high.

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Alibaba Group Holding Ltd. on Thursday unveiled its latest open-sourced the QwQ-32B model. The platform marked a big leap over the previous version using just a fraction of the data DeepSeek’s R1 employs. Also this week, Manus AI launched what it called a general AI agent, or a bot that can perform tasks, saying its model is performing better than OpenAI’s DeepResearch on at least some fronts.

Alibaba’s stock surged as much as 8.2% in Hong Kong, the most intraday in nearly two weeks, helping propel an index of Chinese tech shares about 5% higher, on track for the strongest close since 2021. In mainland China, Focus Technology Co., which has AI agent products, soared by the 10% daily limit. Related stocks including software maker Client Service International Inc. also jumped.

The gains follow DeepSeek’s AI breakthrough earlier this year, which ignited a bull run for Chinese stocks and sent shockwaves across global markets. The tech sector got another boost this week after China said at the National People’s Congress it would support the extensive application of large-scale AI models and development of new-generation intelligent terminals and manufacturing equipment.

Alibaba in particular has gone on a tear, gaining some $135 billion of market value this year. Investors have warmed to the company founded by Jack Ma as it stabilizes a business sideswiped by a years-long government crackdown. Its growing prowess in AI and mounting signs of Beijing’s support helped galvanize its comeback.

“There’s quite a few positive drivers for Alibaba with their open-source reasoning model the latest catalyst,” said Vey-Sern Ling, a managing director at Union Bancaire Privee. “Their core business is improving and clearly will benefit from China’s push to drive consumption. Investors now also recognize the value that AI will bring to their cloud computing business.”

In the wake of DeepSeek’s emergence, multiple companies have trotted out models and services they claim match the Chinese startup’s or OpenAI, whose ChatGPT is credited with igniting the generative AI boom. The litany of rollouts has captivated both investors and the Chinese public.