Alibaba announces giant AI model and advanced chip, sending its shares up 5%

Alibaba Group announced on Tuesday that it is developing an artificial intelligence model four times larger than its current flagship model, and unveiled a next-generation AI chip it described as the most powerful in China, sending its shares up 5%.

The announcement comes as Chinese tech companies race to develop local alternatives to Nvidia’s AI processors amid tightening U.S. export controls.

This reflects the Chinese tech giant’s vigorous efforts to develop all aspects of its AI business, according to Reuters.

Despite this progress, Alibaba CEO Eddie Wu said on Tuesday that “truly leading products of the AI era have not yet emerged,” and praised what he described as the dawn of an era comparable to the Industrial Revolution.

He predicted that machines would eventually produce more than a thousand times the amount of “thinking” generated by humans, compared to less than 3% today.

Alibaba’s current flagship model, Qwen 3.8 Max, contains 2.4 trillion parameters, an approximate measure of the size and capabilities of an AI model.

In a separate statement, Alibaba said it is currently training its next-generation model, Qwen 4, and expects the future Qwen 4.5 and Qwen 5 models to have between 5 trillion and 10 trillion parameters.

Alibaba also unveiled the Chennuo F900 AI chip, which the CEO said is the most powerful in China and delivers performance equivalent to three times that of its predecessor.

Mass production and commercial launch of the chip are scheduled for the first quarter of 2027, and Wu said the company expects “significant growth” in annual AI chip shipments. Alibaba had previously launched the previous-generation M890 chip in May.

Alibaba’s shares rose 5.1% on Tuesday on the Hong Kong Stock Exchange, reaching their highest level in a month.