China’s Great (AI) Leap Forward
China’s Great (AI) Leap Forward
Yesterday, Chinese tech juggernaut Alibaba unveiled its latest artificial intelligence reasoning model, QwQ-32B.
According to Alibaba, QwQ-32B rivals DeepSeek’s flagship R1 model in key areas like mathematics, coding and general reasoning tasks. The news, by the way, sent Alibaba’s shares soaring by 8%.
Alibaba’s QwQ-32B AI model also impresses by matching DeepSeek’s R1 with just 32 billion parameters, compared with R1’s 671 billion. Allow me to explain…
Imagine you’re building two incredibly complex machines to solve puzzles. One machine, QwQ-32B, has 32 billion tiny parts that work together to solve these puzzles. The other machine, DeepSeek's R1, has a whopping 671 billion parts.
Now, here’s the impressive bit: QwQ-32B can solve puzzles just as well as (or even better than) the much larger machine, despite having far fewer parts. It’s like having a compact car that can outhaul a massive truck!
In the world of AI, these “parts” are called parameters. They’re like the building blocks that help the AI understand and process information.
More parameters usually mean the AI can handle more complex tasks — but they also require more computing power and energy to run.
So when Alibaba’s QwQ-32B can match or beat DeepSeek’s R1 with far fewer parameters, it’s a big deal.
It means QwQ-32B is incredibly efficient, able to do more with less.
This efficiency translates to faster processing, lower energy consumption and potentially lower costs for running the AI.
Efficiency aside, Alibaba has committed to substantial investments in AI and cloud computing infrastructure.
Last week, the company pledged 380 billion yuan ($52.4 billion) over three years — more than it invested in these sectors over the past decade.
The timing of this launch is particularly noteworthy as it coincides with the release of Manus, an autonomous AI agent developed by Chinese firm Monica.
This groundbreaking AI agent can tackle complex tasks — without constant human guidance, setting it apart from traditional AI assistants.
Manus employs a unique multisignature approach, leveraging multiple independent models to enhance its decision-making capabilities. This architecture allows for more reliable task execution.
A brief demonstration at the company’s website showcases Manus’ impressive capabilities. The AI agent, for instance, autonomously screens candidates for a specialized engineering role by analyzing resumes and extracting vital information, mimicking human-like task completion.
And Monica announced plans to open-source parts of Manus' technology later this year. This will include the system’s inference component — the part of an AI system that uses learned patterns to make predictions or draw conclusions from new data.
Ultimately, QwQ-32B's efficiency and Manus' advanced task execution demonstrate a leap forward in AI capabilities.
“What we're witnessing is Phase 2 of the AI boom,” says Paradigm’s AI pioneer James Altucher, “showing what AI can actually do.
“And this is where things get really interesting.” Read on…
AI Optimizes Binge-Watching
“Remember how long it used to take to build a successful company? A decade was considered fast,” James continues. “Today, AI-powered startups are hitting $100 million in revenue within 12 months.
“How? AI handles everything from customer service to marketing to product development. Tasks that used to require entire departments can now be managed by a handful of people with the right AI tools.
“Then there's entertainment,” James says. “Netflix just smashed records, adding 18.9 million subscribers in a single quarter — the biggest jump in its history.
“Its stock hit $1,064.50, an all-time high. This isn't just luck.
“AI is revolutionizing how Netflix creates and delivers content,” he notes. “It predicts which shows will succeed, helps writers develop scripts faster and even assists with special effects.
“The result? More hits, lower costs and happier subscribers.
“But perhaps the most striking example comes from the world of software development.
“A recent Microsoft study found something remarkable: Programmers using AI assistants completed their tasks in half the time compared with those working without AI,” James notes.
“That's not a small improvement. It's a revolution in productivity. Imagine cutting your workday in half while getting the same amount done.
“Think about what this means for the economy.
“Companies like Microsoft aren't just burning cash on a fancy new toy. They're investing in tools that are already transforming how we work and create.
“Sure, the market is having a moment of doubt,” James says. “That's natural when you're dealing with something this revolutionary.
“But history teaches us something important: The biggest opportunities often come disguised as problems.
“The internet looked risky in 1999. Amazon looked shaky in 2001. Tesla seemed crazy in 2019.
“Yet those who saw through the temporary chaos and stayed focused on the long-term potential built generational wealth.
“AI isn't just another tech trend,” James concludes. “It's a fundamental shift in how we work, create and solve problems.
“For investors willing to look past the current market drama, this could be one of those rare moments when fear creates opportunity.”
[Everything but the BBQ: Join James Altucher and his team as they livestream from SXSW in Austin, Texas on Tuesday, March 11 at 2 p.m. ET.
The event — Tech Turning Point 2025 — is totally free. You won’t need your wallet at all. We just want YOU to be there!
Don’t miss the rapid-fire Q&A or the interactive live chat where James and his team answer your pressing questions about AI… Elon and DOGE… and some of the biggest predictions for the rest of 2025.
In the meantime, make sure to bookmark this link because it’s where we’ll host the live event on Tuesday.]
“Meh” Job Number, “Meh” Market Reaction
Anyone hoping the February job numbers would give some direction to the stock market — either up or down — has to be disappointed today.
The wonks at the Bureau of Labor Statistics conjured only 151,000 new jobs for the month — barely enough to keep up with population growth.
If you’re wondering, any impact from the DOGE-driven job cuts within the federal government won’t show up until next month’s report. (And it appears those cuts are already being dialed back with the president’s directive yesterday to pursue those cuts with “the ‘scalpel’ rather than the ‘hatchet.’”)
The official unemployment rate ticked up to 4.1%. It’s hovered in the 4.0–4.2% range since last spring.
But the “U-6” rate leaped from 7.5% up to 8.0% — the highest since late 2021. This number includes part-timers who want to work full time as well as people who’ve given up looking for work within the past year. If you’re looking for “weakness in the labor market” in official statistics, it’s here.
This is the last jobs report before the Federal Reserve makes its next decision on interest rates in another 12 days. Before then, the February inflation numbers come next week.
All that said, Mr. Market can scarcely generate a reaction.
After another sell-off yesterday with the S&P 500 falling 1.8%, the tape so far today shows a modest drop of less than a half-percent to 5,713. The Dow’s losses are a little less, the Nasdaq’s a little more.
For whatever it’s worth, those losses yesterday came despite another tariff reprieve: Import taxes on most Canadian and Mexican goods won’t kick in now until April 2. (“There were three changes in 24 hours affecting us as a North American auto supplier, and that’s a little bit disconcerting,” a Michigan businessman tells the Financial Times.)
Today’s headlines from the White House include the president “strongly considering” more sanctions on Moscow above and beyond everything the Biden administration did. (You read that right. “I’ve officially contracted Trump fatigue,” co-editor Dave says in an instant message.)
But superpower tensions aren’t reflected in the gold price — nearly flat at $2,910. Silver’s losing ground as the week winds down, but still over $32. Oil is staging a Friday recovery, up a buck to $67.35.
Bitcoin got whipsawed after Trump signed an executive order creating a “strategic crypto reserve”… but White House crypto czar David Sacks indicated the government won’t be acquiring any more crypto than it already owns through criminal or civil seizures.
The Bitcoin price sank from $90,400 to under $86,000 in a matter of minutes last night. Checking our screens it’s back to $88,633. Clearly, the do-or-die $90K level watched by Paradigm chart hound Greg Guenthner isn’t holding.
Ride the Bull
“Buying oversold quality stocks during bull markets is one of the best strategies for creating wealth,” says Paradigm’s maverick trader Enrique Abeyta. “And the market is giving us one of those opportunities right now.
“Remember, bull markets persist much longer and go much higher than most expect,” he says. “Here is one of my favorite charts from Bespoke Investment Group showing the duration and magnitude of the last century’s major bull markets…
“Since the table is about a month old, we can add 35 days and deduct roughly 5% from the data highlighted in yellow. But not much has changed.
“If this bull market falls within the average, we still have another plus-40% and six months to go. But we're just getting started if it runs like several larger ones in recent decades!
“Plus, other data points suggest this market is heading higher…
“Objectively, the most recent earnings reports were great!” Enrique emphasizes.
“As of a couple of weeks ago, the S&P 500 was on pace to post an earnings growth rate of 16.9% for Q4 2024. That was with the vast majority of companies having reported.
“That number may come down a bit with the final reports, but if it is anywhere near there, it would be the highest year-over-year growth rate since Q4 2021.
“The recent Nvidia Corp. (NVDA) earnings report is a great example,” says Enrique.
“I have been very vocal about our concerns with NVDA stock.
“Slowing infrastructure construction and increasing competition will eventually pressure their results. When that happens, NVDA stock will likely lose more than $1 trillion in market capitalization.
“While I am confident this will eventually happen, it’s not happening right now,” he adds.
[Life comes at you fast…
Kudos to Enrique for sticking his neck out with this gutsy prediction in October 2024! Moving on… ]
“The company just reported 78%-plus year-over-year growth in revenue and 80%-plus growth in earnings. NVDA stock will not be cut in half off strong earnings results like these.
“The same is true for the overall stock market…
“We have an incredible trading opportunity in the stock market right now after last week’s sell-off,” Enrique says. “What has been interesting about this sell-off is that many stocks have not gone down.
“The equal-weighted S&P 500 index (SPW) is outperforming the market capitalization-weighted S&P 500 (SPX). You may have seen this in the price action of your stocks.
“SPW’s outperformance supports my bullish outlook and suggests that megacaps have been hit the hardest. You may want to buy these beat-down leaders.
“Take a look at this post from X showing the moves in the Magnificent Seven (plus two other) stocks…
“Maybe these companies won’t lead the stock market in 2025,” Enrique says. “That doesn’t mean they aren’t great companies with strong competitive positions, incredible balance sheets and cash flows.
“Remember that BULL markets are the time to be aggressive and take advantage of weakness,” he reminds. “You can change your financial future by being thoughtfully aggressive.
“That time is now.”
Comfort Food
A funeral home in China’s southwestern Guizhou province has become an unlikely foodie destination.
The Erlong Funeral Home’s canteen has unwittingly sparked a culinary craze with its to-die-for noodles — topped with a “choice of mixed meat, spicy chicken, minced meat or pig’s trotter,” says South China Morning Post.
“Many people rave about our rice noodles because our chefs are exceptionally skilled,” says a funeral home employee. “We use only fresh ingredients, our broth is simmered with pig bones for hours and our chilli sauces come from a secret recipe.”
Courtesy: BBC, X
But as news of the menu item spread, priced at 10 yuan ($1.40) per bowl, the funeral home found itself dealing with long lines of “mourners” waiting to order noodles, lines which far exceeded legitimate mourners waiting to pay their respects.
Courtesy: @Earthlings1997, X
No pig’s trotter for me, thanks…
“We face immense pressure managing the influx of visitors,” says the unnamed employee. “Some do not attend the funeral services but pretend to be relatives or friends, making it hard for us to distinguish them.”
(Where’s “Soup Nazi” when you need him?)
Although the dish is generating significant buzz, the funeral home doesn’t plan to open its business to the general public.
Perhaps families who hire professional mourners — an 1,800-year-old Chinese practice — could skip cash and pay via the coveted noodle dish instead?
Sorry, reader: Try as we might, we couldn’t come up with the noodle recipe… Guess it’s a secret chefs will take to their graves.
Happy Friday!
Best regards,
Emily Clancy
Associate editor, Paradigm Pressroom's 5 Bullets
