Jack Ma, the founder of Alibaba, a representative player among China's first-generation technology corporations, is intensifying efforts in the artificial intelligence (AI) sector. He is particularly encouraging the AI institutional sector and accelerating recruitment and organizational restructuring. Faced with sluggish economic conditions and intensified competition in the previously strong growth driver of e-commerce, Alibaba has identified the AI sector as a breakthrough. Although Alibaba's stock has risen about 30% this year, responding to Ma's decision, concerns about revenue generation remain.
On the 12th, according to Chinese economic media outlet Caixin, Ma visited Alibaba's Xixi campus in Hangzhou, Zhejiang province, the day before to meet employees. This visit comes about two months after his appearance at the 20th anniversary event of Ant Group, Alibaba Group's fintech subsidiary, on Dec. 9. Recently, Ma has been increasingly active in public engagements, having also visited the company on Nov. 29 last year. He had refrained from external activities after criticizing financial authorities at a public event in October 2020, which resulted in Ant Group's IPO being suspended.
Market attention is particularly focused on Ma's visit to 'Quark', one of the group's intelligent information business units. Quark, which has adopted the slogan 'A universal assistant for 200 million people', offers AI-based smart search, cloud, and document processing services. Notably, accompanying Ma is Li Shan, president of 'Xianyu', Alibaba's second-hand trading platform. Quark and Xianyu, along with the online wholesale trading platform '1688' and the intelligent mobile office platform 'DingTalk', are considered the 'Four Little Dragons' of Alibaba Group. In November 2023, Alibaba CEO Wu Yongming identified these businesses as strategic innovations based on AI, announcing intentions for continuous investment over the next 3 to 5 years.
Ma is focusing on the 'AI2C (AI To Consumer)' business. At the Ant Group's 20th anniversary event in December last year, he emphasized that 'the changes brought about by the AI era over the next 20 years will surpass everyone's imagination', stressing that the group's future must be centered on AI. This month, he has also recruited AI scientist Xu Zhuhong, who previously served as a professor at Nanyang Technological University in Singapore and worked at the American AI software manufacturer Salesforce. Xu will be responsible for fundamental research and application solutions for AI2C, including multimodal technology. Alibaba's AI2C division is reportedly forming a top-tier AI algorithm research and engineering team centered around Xu.
The Chinese investment community is paying close attention to whether Ma can lead Alibaba into a second golden era through AI. Alibaba's main growth driver has traditionally been Taobao, the largest e-commerce platform in China. However, amid a sluggish domestic economy and fierce industry competition, the firm's growth rate is gradually declining. Jeil Financial noted that 'as the growth of Alibaba's core e-commerce business slows, how to harness the wave of AI and capture the younger generation is a crucial challenge for Alibaba in the future.'
Alibaba is beginning to yield results. At the end of last month, the company launched the AI large language model (LLM) 'Qwen 2.5 Max', which serves as the foundation for services such as chatbots and virtual assistants. Alibaba claims this model 'surpasses OpenAI's GPT-4o, DeepSeek's V3, and Meta's Llama 3.1 in nearly every area', and it is reported that Apple is considering integrating it into its devices, including iPhones, in China. Overall, the market is favorable toward Alibaba's AI-centered direction, with its Hong Kong market stock rising about 30% this year.
However, the difficulty in monetizing the AI business is viewed as a limitation for Alibaba. In response, Alibaba has integrated Quark into the AI2C institutional sector and merged it with the AI device brand 'Tmall Genie' for new hardware development, such as 'AI glasses.' This strategy aims to accelerate product development and increase sales. Shinlang Economic noted that 'many investors believe AI will be a turning point for Alibaba, and there is significant interest in the upward momentum that Alibaba Cloud and LLM will bring', while also expressing that 'concerns remain about how to monetize AI capabilities, with attention focused on what plans Ma has in store.'