Alibaba’s big bet on artificial intelligence (AI) could reportedly make it one of the world’s biggest companies.
That’s according to a report Saturday (Sept. 20) by CNBC, charting the Chinese tech giant’s shift from eCommerce to AI.
In the last three years, Alibaba has taken part in deals worth more than $3.3 billion, including investments in AI model startups Moonshot and MiniMax to robotics startup Limx Dynamics, the report said, citing data from PitchBook.
Meanwhile, the company plans to spend $53.42 billion in AI and cloud infrastructure over the next three years. More than $14 billion has been invested in AI infrastructure and research in the past year, Wei Sun, principal analyst at Counterpoint Research, told CNBC.
“Alibaba is positioning itself as China’s most aggressive AI investor,” said Sun. “This level of spending is unprecedented among private Chinese firms and rivals the capex trajectories of U.S. tech titans.”
Alibaba could join a small group of American companies in seeing its market capitalization reach $1 trillion, up from its current level of less than $400 billion, Matthew Peterson, managing partner at Peterson Capital Management, told CNBC.
The company announced last month that AI products helped drive double-digit revenue growth, saying in an earnings report that Alibaba was “embarking on a new chapter of entrepreneurship by investing in two strategic pillars of consumption and AI + Cloud.”
The company’s cloud division saw 26% year-over-year revenue growth, driven in part by its customers’ increasing adoption of AI-related products.
“During the quarter, AI-related revenue accounted for over 20% of revenue from external customers as AI demand continued to grow rapidly,” Alibaba Group CEO Eddie Wu said Friday during the company’s quarterly earnings call. “We’re also seeing AI applications driving great growth momentum of traditional products, including compute and storage.”
In other AI news, PYMNTS wrote last week about the technology’s increasing use in B2B applications, such as onboarding.
“What companies are starting to see is, hey, there are real applications where AI can help,” Ryan Frere, executive vice president and general manager B2B at Flywire, said in a recent interview with PYMNTS.
Meanwhile, the PYMNTS Intelligence report “Smart Spending: How AI Is Transforming Financial Decision Making” showed that more than 8 in 10 CFOs at large companies are either already using AI or thinking about adopting it.
Source: https://www.pymnts.com/