BEIJING, Feb 25 (Reuters) - Alibaba will release an open-source version of its video and image-generating artificial intelligence model, Wan 2.1, the Chinese tech giant said in a post on X on Tuesday.

Alibaba shares rose 4.6% after tumbling 10% on Monday.

The company will give full details in a recorded video at 11 p.m. (1500 GMT), a spokesperson said.

The release of the model comes as competition intensifies in China's AI market, following DeepSeek's launch of its latest open-source models last month. Those models have shaken the global AI industry by delivering performance comparable to leading products from companies like OpenAI, which has shifted towards closed-source offerings.

Alibaba initially introduced its latest version of video and image-generating AI model in January, later renaming it Wan from Wanx, touting the model's ability to generate highly realistic visuals.

In a previous statement, Alibaba highlighted its top ranking on VBench, a leaderboard for video generative models, where it leads in key dimensions such as multi-object interactions.

On Tuesday, Alibaba released a preview version of its reasoning model, QwQ-Max, which it plans to make open source upon the official release of the full version, which is expected soon.

Earlier this week, Alibaba announced plans to invest at least 380 billion yuan ($52 billion) over the next three years to bolster its cloud computing and AI infrastructure.