This January, DeepSeek captivated the global tech community with its groundbreaking AI model, offering powerful capabilities at a fraction of the cost. In response, Alibaba's engineers sacrificed their Spring Festival vacations and put in overtime to close the gap. Speaking at the VivaTech conference in Paris, Alibaba Chairman Joe Tsai disclosed that following the release of DeepSeek's R1 model, the company acknowledged it was lagging behind in the realm of AI innovation.