Shares of Alibaba (NYSE: BABA) rose over 7% in pre-open trading Friday following a rumor that the company would make a 10%, or $1 billion, investment in AI company DeepSeek. The China tech giant has since denied the rumor, with shares giving up some of the early gains but still trading up 3.5% at the last check.

According to the Chinese news outlet The Paper, Yan Qiao, a vice president at Alibaba , said on WeChat, "As a fellow Chinese and Hangzhou company, we applaud DeepSeek, but news circulating that Alibaba will invest in DeepSeek is fake news."

DeepSeek took the world by storm recently after releasing an AI model at a fraction of the cost of other, more established AI players.