China’s Alibaba on Monday unveiled its largest and most capable AI model to date, sending its shares surging, while a research firm said DeepSeek's latest product offers cut‑throat pricing that is more than 100 times cheaper than Anthropic's Claude Fable 5.

Alibaba announced on Monday the launch of its most powerful artificial‑intelligence model to date, sparking a sharp rise in the company’s share price as investors bet on the firm’s expanding role in the fast‑growing AI sector.

Alibaba’s new flagship model

The new model, described by Alibaba as the largest and most capable it has ever built, is expected to support a wide range of applications from natural‑language processing to complex data analytics. Alibaba highlighted improvements in both scale and efficiency, positioning the model as a direct competitor to offerings from OpenAI, Google and other leading AI labs.

Analysts noted that the announcement underscores Alibaba’s ambition to capture a larger share of the domestic AI market, where regulatory support and a massive user base provide a fertile environment for rapid deployment.

DeepSeek’s ultra‑low‑cost alternative

In parallel, Chinese research firm DeepSeek unveiled a new AI model that it claims costs more than 100 times less to run than Anthropic’s Claude Fable 5. The firm emphasized that the low price point could democratise access to advanced language models for smaller businesses and developers.

DeepSeek’s pricing strategy hinges on a streamlined architecture and aggressive optimisation of compute resources, allowing it to offer subscription rates that are a fraction of those charged by Western providers.

Market reaction and implications

Following Alibaba’s announcement, the company’s stock jumped noticeably on the Shanghai exchange, reflecting investor confidence in the firm’s AI roadmap. Meanwhile, DeepSeek’s cost‑focused approach may pressure rivals to reconsider pricing models, especially in price‑sensitive markets.

  • Alibaba’s model aims for enterprise‑grade performance
  • DeepSeek targets affordability for startups and developers
  • Both firms seek to expand China’s AI ecosystem

The dual announcements highlight a broader trend in China’s AI landscape: one side pushing the boundaries of model size and capability, the other championing accessibility through ultra‑low‑cost solutions.

Marketscreener coverage of Alibaba’s AI model launch and DeepSeek pricing