Alibaba Group announced on Tuesday that it was developing an artificial intelligence model up to four times larger than the company's current flagship model, as it also presented a next-generation AI chip touted as China's most powerful, sending shares up 5%.
The launch comes as Chinese technology companies race to develop domestic alternatives to Nvidia's AI processors amid tightening U.S. export curbs.
The announcements at Alibaba Cloud's annual Apsara conference in the eastern city of Hangzhou underscore the Chinese technology giant's push to build out every layer of its AI business.
These efforts range from foundation models and semiconductors to data centers needed to train and deploy increasingly powerful AI systems.
"The truly groundbreaking products of the Machine Intelligence era have not yet arrived," however, said Chief Executive Eddie Wu, hailing the dawn of an era comparable to the Industrial Revolution.
He predicted machines would eventually produce more than 1,000 times the "thinking" of all humanity, up from less than 3% today.
Wu said Alibaba's Qwen team plans to train a new model with 5 trillion to 10 trillion parameters, to tackle "more complex, longer-horizon tasks" as it pursues an artificial superintelligence, or one that surpasses human capabilities.
Alibaba's current flagship, Qwen 3.8 Max, has 2.4 trillion parameters, which are a rough measure of an AI model's size and capability.
In a separate statement, Alibaba said it is currently training its next-generation model, Qwen 4, with future Qwen 4.5 and Qwen 5 models expected to scale up to 5 trillion to 10 trillion parameters.
The Qwen team had made "meaningful" progress in getting models to improve themselves by identifying weaknesses, doing experiments and generating training data with limited human involvement, he added.
Alibaba also unveiled the "Zhenwu V900," a new AI chip developed by its T-Head semiconductor unit.
Wu said the processor delivers three times the performance of its predecessor, the M890, and can be linked in clusters of up to 500,000 chips to train and run the largest AI models.
The chip is set for mass production and commercial release in the first quarter of 2027, and Wu said the company expected "significant growth" in annual AI chip shipments.
Alibaba launched the previous-generation M890 chip in May.
Alibaba's Hong Kong-listed shares surged 5.1% on Tuesday to their highest in a month.
Wu also set a target for Alibaba Cloud's global data center capacity to surpass 20 gigawatts (GW) by 2032.
Customer demand for AI was "exceptionally robust" and was accelerating Alibaba Cloud's revenue growth, he added, though supply chain constraints limit the pace of expansion.
"The industry's mid-to-long-term demand far outpaces our supply capabilities," Wu said, adding that Alibaba Cloud would begin bringing its AI supernodes online at commercial scale this quarter.
He likened AI coding to the light bulb of the electrical age, an early application rather than a breakthrough product.
