What’s going on here?

QwQ-32B might sound like something Elon Musk would name a child, but this is a different tech prodigy altogether: Alibaba’s latest AI model.

What does this mean?

This model might not have the snappiest name on the block, but it sure does have some juicy numbers. The tool is said to perform at a similar level to its rivals – but using significantly less data than DeepSeek’s R1. That’s a serious leap in efficiency. Impressed by the second serious contender of the year from China, investors sent Alibaba’s stock up 8% after the announcement. That helped lift the country’s Hang Seng Tech Index by 5% to its highest level since 2021. But even after that uptick, it looks relatively cheap – trading at less than half of its peak from four years ago.

Why should I care?

Zooming in: Maybe we can afford a house in the metaverse.

Alibaba has committed to spending some $52 billion on AI infrastructure over the next three years. And it’s not the only one scribbling nine or ten zeros on checks: the Chinese government is redirecting state support into AI, as well as easing the heavy restrictions that’ve been weighing down tech. See, China used to rely on money-hungry sectors like real estate to spur its economy – but instead of helping, the flailing property sector is actively hurting the country. Combine that with investors’ excitement for anything AI, and it’s no wonder the government’s pinning its hopes on tech.

The bigger picture: Like Survivor, but with chips instead of sticks.

China’s decision to bolster local tech isn’t entirely its own, to be fair. The US’s ban on chip exports means that Chinese tech firms need to become self-sufficient to stand a chance against their American competitors. Layer on increasingly lofty US tariffs, and China has little choice but to fortify its own industries rather than relying on international trade.

What’s going on here?

The European Central Bank (ECB) trimmed its key interest rate to 2.5% – exactly as analysts expected.

What does this mean?

This cut is the ECB’s sixth in nine months, bringing the deposit rate down to its lowest level since February 2023 – and you can see why. European inflation seems under control, but the region’s economy could use a lighter touch: recent data has shown that it’s struggled to build momentum. So the central bank will be hoping that lower rates – which make it cheaper to borrow money – will encourage both firms and shoppers to spend more.

Why should I care?

Zooming in: Germany’s swiping the plastic.

Germany is known as Europe’s workhorse, with a manufacturing industry that can usually pull far more than its own weight. But the country’s performance has been more pony than thoroughbred lately – and the government’s determined to turn that around. Germany announced plans to borrow nearly a trillion dollars this week, which will be split between two main funds covering defense and infrastructure. The country can afford it, after all: Germany’s debt is worth 63% of its economy, which pales in comparison to the US’s 123%. The plan could put some sprightliness back into Europe’s biggest economy – and with any luck, that’ll spill into neighboring countries too. If so, the ECB won’t need to rush to bring rates down further.

The bigger picture: When America sneezes, Europe… does alright, actually.

You’d be forgiven for calling Europe the underdog, what with the US throwing out tariff threats and withdrawing military support. But many investors seem to think differently. European stock markets have outperformed their stateside counterparts this year – especially the DAX index, which tracks Germany’s blue-chip companies – and the euro has picked up against the dollar.