New Delhi: Alibaba, the Chinese technology giant, is making a big move towards consolidating its position in artificial intelligence (AI) and cloud computing. Alibaba has made plans to spend more than $50 billion in three years to enhance its AI and cloud infrastructure. The big bet points towards Alibaba’s focus on innovation and its desire to become a leader in AI-infused technology.
Why is Alibaba spending so much?
Alibaba’s move follows a couple of difficult years of tight government crackdown on China’s tech sector since 2020. Through the adversity, the company has recovered, with investor sentiment improving once more. Alibaba just posted an 8% revenue growth, reaching 280 billion yuan for the fourth quarter. Its share prices have also hit a three-year high, reflecting a larger recovery of the Chinese tech sector.
What’s the Plan?
Though Alibaba hasn’t disclosed all the specifics of how it will use the money, the company did state that this investment will be larger than all that it has spent on AI and cloud computing over the last decade combined. The aim is to develop more robust AI capabilities and become a significant partner for businesses applying AI to real-world scenarios. With the increasing computing demands that AI models have, such an investment will ensure that Alibaba remains in the lead.
Alibaba is not alone in making such investments in AI. Microsoft is committing $80 billion for AI data centers this year alone, while Meta has budgeted $65 billion for 2025. There are some particular challenges, though, for Alibaba, particularly the US prohibitions on advanced AI chips by vendors such as Nvidia. Despite these constraints, Alibaba is hopeful. CEO Eddie Wu has gone so far as to comment that Artificial General Intelligence (AGI), a more sophisticated type of AI, is one of the company’s key objectives.
Alibaba has been investing in potential Chinese AI startups, such as Moonshot and Zhipu, and growing its cloud business to enable AI development. The company’s Qwen AI model has fared well in industry tests, demonstrating its increasing prowess in the area. And Apple has chosen to implement Alibaba’s AI technology in Chinese iPhones, a strong vote of confidence in its abilities.
This investment is at a time when China’s government is eager to help its tech industry. President Xi Jinping has recently met with business leaders, including Alibaba co-founder Jack Ma, which is viewed by many as a positive development for large tech firms, that gets back to if the regulatory climate in China becomes more friendly to business, Alibaba may have even greater room to expand.
