Alibaba Chairman Joe Tsai has revealed that the company’s engineers worked through the Chinese New Year holiday to accelerate AI development after the company felt pressured by DeepSeek’s breakthrough. Speaking at the VivaTech conference in Paris, Tsai said DeepSeek’s low-cost, high-performance AI model which launched in January shocked the industry and exposed Alibaba’s lag in the field. “We read the research papers and we said, ‘Holy cow, how come we have fallen behind? We were doing the same things,’” Tsai said. “What happened was our engineering lead decided and said, ‘Cancel your Chinese New Year holiday, everybody stay in the company, sleep in the office, we’re going to accelerate our development.’” Within weeks, Alibaba released its Qwen series models. The sudden, intense push from one of China’s biggest tech companies reflects the impact of DeepSeek’s development as well as Alibaba’s strategic pivot toward AI after a two-year restructuring focused on e-commerce and cloud computing. Tsai emphasized that making Qwen open source is aimed at popularizing AI use and boosting demand for cloud services. Alibaba plans to invest over $53 billion in AI infrastructure over three years and has partnered with Apple to provide AI technology for iPhones. Despite these efforts, Tsai acknowledged ongoing challenges, with Alibaba’s revenue growing just 7% in Q1 2024. [Bloomburg, SCMP]