As China's AI race accelerates, the viral autonomous agent Manus AI has partnered with Alibaba Group Holding Ltd's (NYSE:BABA) Qwen team to develop a localized version tailored for Chinese users.

What Happened: Manus, which was developed by Tencent Holdings (OTC:TCEHY)-backed startup The Butterfly Effect, announced the development on Tuesday, reported the South China Morning Post.

The partnership aims to ensure all Manus features run on domestic models and infrastructure, though a specific launch date has not been disclosed.

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A representative from Alibaba Cloud confirmed the collaboration to the publication, saying both companies are working on open-source models and looking to support broader AI innovation in China.

Why It's Important: Manus gained global attention last week after its invitation-only web preview showcased its ability to perform complex tasks.

A day after the launch of Manus AI Agent, Alibaba also introduced its latest AI reasoning model, saying that it outperforms competing models from OpenAI and DeepSeek.

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Manus AI agent, which builds on models such as Anthropic's Claude and fine-tuned versions of Alibaba's Qwen, is now being compared to Chinese AI frontrunner DeepSeek.

Moreover, Alibaba's Qwen models, open-sourced since August 2023, have powered more than 90,000 derivative models worldwide, according to data from Hugging Face, an AI and machine-learning developer platform.

Alibaba’s wholesale marketplace arm has also set an ambitious goal for full AI adoption by merchants by the end of 2025.

Price Action: Alibaba shares have climbed 63.65% year-to-date. On Tuesday, the stock rose 4.789% to $139.02 during the regular session and added another 0.97% afterward, according to Benzinga Pro.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.