Alibaba unveils Qwen3.5 as China’s chatbot race shifts to AI agents

Qwen3.5 comes in an open-weight and hosted API version, with the company advertising improvements in performance and costs from previous versions.
Qwen3.5 supports new agentic capabilities and is compatible with open-source AI agents like those from OpenClaw.

Image 9: UKRAINE - 2024/12/29: In this photo illustration, the Qwen logo of Alibaba AI Model is seen displayed on a smartphone and the flag of China in the background. (Photo Illustration by Pavlo Gonchar/SOPA Images/LightRocket via Getty Images)

Qwen3 is Alibaba’s latest large language model, which it says combines traditional LLM capabilities with “advanced, dynamic reasoning.”

Sopa Images | Lightrocket | Getty Images

Alibaba Group has released its newest AI model series, featuring enhanced capabilities, as it faces intensifying competition in China’s AI space with several models launched in the past week.

The Qwen3.5 AI model comes in an open-weight version, which allows users to download, run, fine-tune, and deploy it on their own infrastructure. Alibaba also released a “hosted version,” meaning the model can run on Alibaba’s own servers.

Both models were made available on Monday, the eve of the Chinese New Year, and come just a week after Alibaba released a new AI model designed for robots.

The company highlighted that Qwen3.5 offers improvements in performance and cost and was built with “native multimodal capabilities,” enabling the models to understand text, images and video simultaneously within one system.

Leaning into a major AI trend this year, the model also supports new coding and agentic capabilities and is compatible with open-source AI agents like those from OpenClaw, which recently surged in popularity.

AI agents are systems that can independently take actions and complete multi-step tasks on a user’s behalf with minimal supervision.

These agents and their abilities have garnered a lot of attention in recent weeks, after American AI company Anthropic released new agent tools. The potential for these agents to replace the work of software as a service companies, amongst others, has rocked markets.

Alibaba’s local competitors such as ByteDance and Zhipu AI also released upgraded models in the past week aimed at supporting more agent capabilities.

Marc Einstein, research director at Counterpoint Research, told CNBC that artificial intelligence companies are preparing for the possibility that AI agents could “upend traditional Internet business models.”

“If this happens the consequences for those who are not prepared will be severe and [Chinese AI companies] are aware of this,” he said.

Alibaba said that its new Qwen3.5 open-weight model comes with 397 billion parameters — variables that shape how an AI system learns and reasons. While less than its previous flagship model, the company said the latest model showed significant improvement based on self-reported benchmark evaluations.

Alibaba provided benchmark tests showing that Qwen3.5′s performance was on par with leading models from OpenAI, Anthropic and Google DeepMind, though the comparisons were self-reported.

Meanwhile, it also released a “hosted model” called the Qwen-3.5-Plus through its cloud platform Model Studio. Alibaba said this version also demonstrated performance on par with leading competitors. CNBC could not independently verify those claims.

The new Qwen3.5 models also support 201 languages and dialects, up from the previous generation’s 82.Counterpoint’s Einstein said this feature reflects Alibaba’s global ambitions.

The company is expected to release more open-weight models during this Chinese New Year, Lin Junyang, technical lead of Alibaba Cloud’s Qwen team said in a social media post.

Following the release of Anthropic’s latest Claude AI agent tools, other American AI giants have been accelerating the development of agentic capabilities. OpenAI CEOSam Altman said Sunday that the creator of the OpenClaw would be joining the company.

Last month, Google DeepMind head Demis Hassabistold CNBCthat Chinese AI models were just “months” behind Western rivals.

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Alibaba unveils Qwen3.5 as China’s chatbot race shifts to AI agents

Alibaba unveils Qwen3.5 as China’s chatbot race shifts to AI agents

Alibaba unveils Qwen3.5 as China’s chatbot race shifts to AI agents

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