China's first-generation tech corporation Alibaba will invest 380 billion yuan (about 74.9 trillion won) in the cloud and artificial intelligence (AI) sectors over the next three years. Jack Ma, the founder of Alibaba, who fell out of favor with the Chinese leadership after criticizing government regulations, responded to encouragement from President Xi Jinping with a large-scale investment.
According to Chinese economic media sources like Chailianshe on the 24th, Daniel Zhang, chief executive officer (CEO) of Alibaba Group, revealed this plan. This not only exceeds the total amount Alibaba has invested in the sector over the past decade but also marks the largest AI investment among private corporations in China.
CEO Zhang noted, "AI has exploded beyond expectations, and the domestic science and technology industry is developing vigorously," adding, "Alibaba will focus all efforts to accelerate the infrastructure development of cloud and AI hardware, and will promote the overall ecosystem development of the industry."
Alibaba had mentioned the AI investment plan during its earnings announcement on the 21st. Its revenue in the fourth quarter of last year was 280.2 billion yuan (about 55.2 trillion won), an 8% increase from the previous year, with the revenue from the cloud institutional sector rising 13% to 31.7 billion yuan (about 6.3 trillion won). This is attributed to the surge in domestic demand for AI and cloud services.
Through this large-scale investment, Alibaba plans to seize the leading position in the AI business. Chailianshe reported, "Currently, Alibaba Cloud is Asia's leading cloud computing corporation, and Alibaba's 'Tongyi Qianwen' (通义千问·AI chatbot) is recognized as a globally acknowledged open-source model."
This investment plan has gained attention as it coincides with the reinstatement of Alibaba founder Jack Ma. Ma was invited to a private sector roundtable hosted by President Xi Jinping on the 17th. Ma fell out of favor with authorities following his remarks in October 2020 at a forum in Shanghai, where he stated that "the financial regulations of the Chinese leadership stifle innovation," and eventually disappeared from the public eye. He later left China and lived abroad, relinquishing control of Ant Group, a fintech company under Alibaba, in 2023. Now, he has responded with significant investment in the AI sector, a core industry in China, after receiving encouragement from Xi.
Meanwhile, the Chinese AI industry is expected to see major corporations follow Alibaba's lead in investments. ByteDance, which owns TikTok, plans to invest more than 150 billion yuan in capital expenditure this year, most of which is reported to be allocated for AI-related investments.