DeepSeek’s AI learning model has ushered in a new era of Chinese confidence in the artificial intelligence space, with companies rushing to take advantage of the Nvidia (NVDA) sized hole created by its successful chatbots ahead of the Lunar New Year holiday.
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Investors on Monday, January 27th, dumped shares in NVDA and other leading U.S. tech names that have been supplying companies with the “picks and shovels” to lead the AI revolution. However, DeepSeek’s R1 model launched last week has upended assumptions about the industry and pushed Chinese companies into the limelight. President Trump called this moment a “wake-up call” for U.S. industry.
BABA and DeepSeek Launches
Riding the wave, Alibaba’s (BABA) Qwen team on Monday released a new family of AI models, Qwen2.5-VL, that can perform a number of text and image analysis tasks.
The models can parse files, understand videos, and count objects in images, as well as control a PC, which the company says is similar to the model powering OpenAI’s recently launched OPerator, an AI agent that can perform tasks autonomously.
“Notably, Qwen2.5-VL achieves significant advantages in understanding documents and diagrams, and it is capable of playing as a visual agent without task-specific fine tuning,” the company said on its blog.
Also on Monday, DeepSeek released Janus-Pro, a text-to-image generation model which it says is ahead of competitors such as OpenAI’s Dall-E 3 and Stability AI’s Stable Diffusion 3.
And last week Moonshot, a startup based in Beijing, updated its reasoning model to Kimi k1.5, while Zhipu updated its enterprise-level AI agent GLM-PC, which helps customers to complete forms and parse financial reports.
Meanwhile, Baidu (BIDU) said its generative AI-integrated Wenku platform had reached 40 million paying users.
The moves underscore how China is catching the U.S. without necessarily relying on the most advanced NVDA chips.
“We believe that China’s AI sector is advancing at a pace comparable to that of the United States,” Jo Huang, head of private equity at Raffles Family Office, told CNBC.
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