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Today’s Menu

• Alibaba Just Dropped Its Biggest AI Model Ever

• S&P Cuts Tether to Lowest Stability Rating

Markets

TODAY IN AI

Alibaba Just Dropped Its Biggest AI Model Ever

Alibaba unveiled Qwen3-Max-Preview, its largest language model to date with over 1 trillion parameters, betting that scale wins the AI race.

Qwen claims the model outperforms Claude Opus 4, Kimi K2, and DeepSeek-V3.1 on reasoning and coding tasks. It supports a 262K token context window and is available on Qwen Chat, Alibaba Cloud, and OpenRouter with pricing starting at $0.86 per million tokens for shorter prompts.

This is Alibaba's most aggressive AI play yet, directly challenging Western frontier models with massive parameter counts and competitive pricing. The company is betting that raw scale combined with cost efficiency can compete with OpenAI, Anthropic, and Google's offerings.

When Chinese tech giants can field trillion-parameter models that claim to outperform Western competitors on benchmarks while drastically undercutting on price, the global AI competitive landscape shifts dramatically.

The AI arms race between East and West just escalated again - and pricing may become the new battleground.

TODAY IN CRYPTO

S&P Cuts Tether to Lowest Stability Rating

Here comes the Tether FUD again - S&P Global Ratings just cut USDT to the lowest score on its stability scale, calling its dollar peg "weak" and warning reserves are taking on more risk.

S&P's concern is straightforward: Bitcoin now makes up about 5.6% of assets backing USDT, while Tether's extra reserve cushion is only 3.9%. If Bitcoin and other risky assets drop simultaneously, USDT could become undercollateralized.

About 24% of total reserves are now in bitcoin, gold, loans, corporate bonds, and other volatile assets - up from 17% a year ago. S&P also flags no full audit, no detailed proof-of-reserves breakdown, and insufficient clarity on banks and custodians holding assets.

Tether CEO Paolo Ardoino pushed back hard, calling the report "misleading" and saying traditional rating models don't understand "digitally native money." He points to Tether holding over $112B in US Treasuries (17th-largest holder globally), 116 tons of gold, and never refusing a redemption request from verified users.

The picture is split: S&P sees a key crypto dollar rail taking more risk without money market fund protections. Tether sees itself as crypto's shadow central bank with massive holdings and proven peg stability through multiple crises.

Both views can be true simultaneously. The risk profile is rising. The system is also bigger and more important than ever.

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Thanks for reading!

Until next time,

Damon James