Welcome to Seeking Alpha's Wall Street Lunch, our afternoon update on today's market action, news, and analysis.

Good afternoon. Today is Thursday, March 6th, and I'm your host, Kim Khan. Our top story so far.

Chinese companies are continuing to make big strides in artificial intelligence, as Alibaba unveiled its latest reasoning model

with fewer parameters, which rivals deep-seeks R-1 and OpenAI's O1 Mini.

The new model, called QWQ32B, was developed with 32 billion parameters, referring to the

training data that enables the model to generate desired outputs.

Alibaba claims QWQ32B can achieve performance comparable to DCXR1 model, which uses 671 billion

parameters.

Alibaba's Quen team evaluated the new model across a range of benchmarks to assess its mathematical

reasoning, coding, and general problem solving.

It more or less matched the performance of R1 and OpenAI's cost-efficient O1 mini-model.

The release comes as Alibaba committed to invest over $52 billion in its cloud computing and AI infrastructure over the next three years.

On the economic front, the U.S. trade deficits surged

34% to a record $131.4 billion in January, higher than the $123 billion shortfall expected,

and up from $98.1 billion in December, as fear of tariffs caused a spike in imports.

January imports rose 10% to 401.2 billion. Wells Fargo economists say,

we ultimately expect tariffs to impart a modest, stagflationary impulse of slower growth

and higher inflation on the U.S. economy. The degree of the shock depends on many factors,

such as exclusions and how long tariffs are in place. Today's release highlights that the sheer threat of tariffs has already influenced behavior.

To the extent the surge in imports was a pull forward in demand in preparation for tariffs,

we may see some payback in the coming months.

Looking to the labor market ahead of Friday's jobs report,

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