Alibaba Challenges US Dominance With Qwen 3.5 Launch

Alibaba Group Holding Ltd (NYSE:BABA) has launched its latest AI model, Qwen-3.5, intensifying the rivalry between China and the U.S. in the artificial intelligence arena.

The model, featuring 397 billion parameters, is a significant leap from its predecessor and competes with top U.S. models from OpenAI and Alphabet Inc. (NASDAQ:GOOGL) (Google DeepMind).

The Qwen-3.5-Open-Source model shows significant advancements, despite being smaller than its predecessor, Qwen-3-Max-Thinking, which had over 1 trillion parameters, SCMP reported on Monday.

The closed-source version, Qwen-3.5-Plus, boasts a context window of 1 million tokens, marking one of the largest in the industry.

The highly anticipated launch, scheduled just ahead of the Lunar New Year, concluded a whirlwind week in which almost all leading Chinese AI firms unveiled new flagship models, the report noted.

Over the past year, China has emerged as a major driver of open-source artificial intelligence, setting itself apart from the more closed, proprietary model strategies commonly adopted by many Silicon Valley companies that choose not to make their model weights publicly available, the report said.

Download data from Hugging Face showed that Chinese open models surpassed their U.S. counterparts in global adoption last year, with DeepSeek and Qwen accounting for the majority of that growth, the report added.

Open-Source Push Expands Into Robotics

Alibaba’s strategic focus on open-source technology is evident in its recent AI developments.

The company’s DAMO Academy has also introduced RynnBrain, a model designed to enhance robotics and real-world task automation.

This model is trained on Alibaba’s Qwen3-VL vision-language model, showcasing the company’s commitment to integrating open-source AI across various platforms.

RynnBrain’s capabilities include mapping objects and navigating complex environments, such as kitchens or factory lines, positioning it as a competitor to Google’s Gemini Robotics-ER 1.5 and Nvidia Corp’s (NASDAQ:NVDA) Cosmos-Reason2.

This emphasis on open-source innovation is part of Alibaba’s broader strategy to accelerate AI development and reduce costs for developers.

Adoption Metrics And Global Partnerships

Alibaba’s open-source approach is gaining traction, with its Qwen models surpassing 700 million downloads on Hugging Face, becoming the most widely adopted open-source AI system.

This strategy aligns with Alibaba’s 2025 AI vision, emphasizing openness and collaboration to foster innovation.

According to SCMP, Alibaba’s commitment to open-source has also attracted significant attention from other tech giants.

Meta Platforms Inc. (NASDAQ:META) has incorporated Alibaba’s Qwen models to rebuild its AI stack, highlighting the growing influence of Alibaba’s open-source initiatives in the global tech landscape.

Performance Benchmarks And Analyst Outlook

The performance of Qwen-3.5 has exceeded expectations, with benchmarks indicating it is on par with leading models from major US companies.

HSBC analyst Charlene Liu has noted that Alibaba’s cloud business is well-positioned to sustain growth amid strong AI demand.

The company’s focus on open-source AI could boost its long-term positioning, driving analysts to upgrade their outlook on Alibaba.

BABA Price Action: Alibaba shares were up 1.14% at $157.50 during premarket trading on Tuesday, according to Benzinga Pro data.

Image by jackpress via Shutterstock