Alibaba unveils major AI model upgrade ahead of DeepSeek release

Alibaba last upgraded its flagship model to the Qwen3 series in April.

• Alibaba reveals enhanced Qwen AI model with video analysis features
• Qwen3.5 supports text, photo, and video inputs up to two hours
• Alibaba, Tencent, and Baidu offer $649M in AI user incentives

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Alibaba Group Holding Ltd. unveiled a major upgrade of its flagship AI model, accelerating a race with a panoply of startups and sectoral leaders aiming to get in ahead of Chinese sensation DeepSeek’s next big platform.

The latest iteration of Alibaba’s Qwen is designed to support AI agent tasks and can understand text, photo and video inputs, the company said in a statement on Monday. It is able to analyze videos as long as two hours, it added.

Alibaba’s Qwen3.5 joins a flurry of upgrades released by rivals from ByteDance Ltd. to Zhipu and Minimax Group Inc. in the weeks leading up to the Lunar New Year. They aim to steal a march on a much-anticipated release from DeepSeek around the first anniversary of the seminal R1, which upended global AI conventions in 2025. Alibaba and its peers are also targeting a weeklong holiday that’s historically proven critical for the adoption of Chinese consumer internet apps.

Alibaba has been among the most aggressive investors in and advocates for AI since DeepSeek reinvigorated the local tech industry. Chief Executive Officer Eddie Wu has pledged more than $53 billion toward infrastructure and AI development — an outlay he said the company could surpass over time.

Alibaba last upgraded its flagship model to the Qwen3 series in April. It rolled out last month its latest reasoning model, Qwen3-Max-Thinking, aiming for performance gains in areas like complex reasoning and autonomous agent capabilities.

Beyond fundamental technological advancement, Alibaba is also locked in a costly subsidy war in AI with rivals including Tencent Holdings Ltd. and Baidu Inc. The trio plans to deploy a combined 4.5 billion yuan ($649 million) of cash incentives to try and attract and retain users for their chatbots during the holidays.

More broadly, the consumer-facing Qwen app is morphing into an all-in-one platform that connects with other parts of Alibaba’s sprawling e-commerce ecosystem. Its 100 million users can now order bubble tea and book travel via agents within the app.