Alibaba Invests $18B to Create AI Unicorn, Aiming to be China's "Open AI"

In the global technology sector today, the hottest concepts are arguably Artificial Intelligence (AI) and new energy vehicles. New energy vehicles are already ubiquitous on our streets in China, and I believe our fellow citizens are well aware of this. The AI concept, on the other hand, might be relatively unfamiliar to some.

However, recent media reports have indicated that China's internet giant, Alibaba, has officially invested in the AI industry. This naturally piques curiosity about what exactly Artificial Intelligence is, what level of development AI has reached globally, and what does Alibaba's entry into the AI field signify?

What is "AI"?

In today's global economic downturn, the surge in AI concepts is undoubtedly a strong stimulant for the international investment market, with major technology manufacturers also seeing the opportunity and eagerly joining the fray.

This includes global tech giant Apple, which not long ago announced its shift from car manufacturing plans to investing in AI.

It's not surprising. After all, in the field of new energy vehicles, China has already made significant strides, and Apple's transformation can be seen as a timely damage control measure. But why did Apple choose the AI field?

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By 2023, I believe we can all sense that the self-driving cars, hailed as the crown jewels of current AI technology, have made significant progress.

The technology behind this is AI's ability to use the latest LiDAR and sensor technology to "see" obstacles in real-time, understand the surrounding environment, and then make reasonable decisions on its own, essentially operating as if it could drive itself.The advancement of this technology is truly rapid, and as a result, there are still many immature aspects at present. However, once this technology is fully matured and applied, it can greatly enhance transportation efficiency and establish a strong protective network for our driving safety.

In addition to this, artificial intelligence has even greater changes in store for us, as AI is quietly transforming the way we interact with machines.

New technologies such as voice recognition, natural language processing, and facial recognition are rapidly advancing, allowing us to chat and communicate with machines in unprecedented ways.

Now, simply by speaking a few simple sentences, we can control smartphones, home appliances, and even unlock our cars.

This intelligent mode of interaction not only makes our lives more convenient but also makes machines increasingly understanding of human beings.

Especially in home life, the scope of artificial intelligence applications is expanding, gradually making smart homes a reality.

Nowadays, microwave ovens, televisions, air conditioners, and more can all become smart appliances. We can control all the electronic devices in our home with voice commands or by remotely operating our smartphones.

This intelligent home management method not only improves our quality of life but also finds new ways to save energy and protect the environment.

Of course, the impact of artificial intelligence on the financial industry should not be underestimated.

By leveraging deep analysis of massive amounts of big data and constructing intelligent risk control models, artificial intelligence can help financial institutions more accurately identify potential risks, issue early warnings, and take effective preventive measures.The application of such technology not only enhances the risk management capabilities of financial institutions but also provides investors with precise investment decision-making basis.

Tech giants are joining the fray.

In recent years, with the sensational explosion in the tech world that OpenAI has developed a super powerful AI program called ChatGPT, the whole world seems to have been boiling like a pot.

This GPT is a significant force in technological innovation and the growth and expansion of various industries. Its success is like a rocket leaving a huge trail of exhaust, propelling AI technology to once again become a hot topic and a global discussion.

ChatGPT brings us not only technological transformation but also its astonishing impact on the industry.

It is like a dark horse that breaks through all barriers to AI development, symbolizing the arrival of a new era of artificial intelligence, which is referred to in the industry as the "Golden Age."

In this trend, of course, tech titans cannot sit idly by; they are eager to try and hope to seize resources in this new technological battlefield.

Let's first take a look at Microsoft, which has a lot of wealth and is owned by Bill Gates.

They are a company that has invested heavily in the ChatGPT investment strategy from an early stage, and the amount of investment is really a big move, a large sum of money thrown in, which is enough to show this company's long-term consideration and ambition in the AI field.Moreover, their continued investment in the subsequent time fully demonstrates their unparalleled confidence in generative AI. They have integrated ChatGPT into various product lines such as their own search engines and office software, which has directly skyrocketed the intelligence level of these products and directly promoted the widespread application of AI in our life and work. Microsoft's current boss once referred to AI as "the steam engine of the brain world," a metaphor that can be said to be very vivid. He pointed out that AI has the power to turn the world upside down, indicating that AI will completely change our social production methods and lifestyles like the steam engine. After this scene, other tech giants such as Google and Tesla also started to step up their pace. Google is fully committed to the transformation and update of the automatic chat robot "Bard," massively adjusting the organizational structure, hoping to find more methods and better results, and using the latest achievements of generative AI to enhance the functionality of their own intelligent assistant products. Tesla's boss Musk's move is even bigger, he directly created an artificial intelligence company called xAI, and also released an AI model Grok that can connect to the social media platform X (formerly known as Twitter), showing his ambitious ambitions in the field of AI and affirmation of AI technology. Zuckerberg, the founder of Facebook, also hinted in his latest statement that the transformation of the "Meta" company will take AI as the focus of their future development, and also showed the key role of AI in emerging fields such as the metaverse. Research shows that by borrowing the capabilities of generative AI, companies can implement more effective and personalized solutions, thereby fundamentally changing the current production processes, business strategies, and business models, thus bringing new transformation and upgrading opportunities to themselves. A report released by the McKinsey Global Institute boldly predicts that deep learning-type artificial intelligence (commonly known as "generative AI") may bring an annual economic value increase of up to 2.6 trillion to 4.4 trillion US dollars worldwide.Such immense commercial potential undoubtedly opens up a vast and boundless landscape of development prospects and opportunities for major technology companies.

Looking ahead, with the continuous improvement and widespread application of AI technology, there is no doubt that we will see a future society becoming increasingly intelligent, more in line with individual needs and characteristics.

Precisely because ChatGPT has ignited a frenzy in AI development, major tech giants have also quickly taken action, sparing no effort to secure a leading position in the new round of competition.

What does Alibaba's investment in "AI" mean?

Although China started relatively late in related fields, the progress China has made in new infrastructure areas such as computing power, chips, and 5G undoubtedly provides strong support for artificial intelligence to perform massive calculations and process large amounts of data.

Moreover, it is worth mentioning that our country's number of AI patent applications has already dominated globally, and people can see how substantial our investment is and how strong our innovation capabilities are.

Nevertheless, to enable the smooth takeoff of China's new generation of artificial intelligence, we must face and strive to overcome some practical difficulties that exist at present.

The first is the issue of hardware infrastructure, especially in the field of AI chips. The United States still has some restrictions on our country, which may slow down our pace in AI research and development, resulting in some limited effects.

Therefore, the independent development of high-end AI chips has become the top priority at present. This requires us to invest more resources, improve our ability for independent innovation, break foreign technological monopolies, and ensure that we can truly be independent in the field of AI hardware.Additionally, the key factor of algorithms, although it seems that we still have a lot of room for improvement in algorithms at present.

In order to make our algorithms more excellent, we need to strengthen cooperation and communication with mathematicians, computer scientists, and experts in other related fields to work together to create more efficient and advanced algorithms.

At the same time, it is also very important for domestic giants like Alibaba to enter the market, which can not only enhance market vitality but also strengthen our own "resistance" to avoid being controlled by others in related fields.

As a big shot in the global Internet field, Alibaba has long been involved in various industries. Now that the field of artificial intelligence (AI) is booming, it will not be absent and is determined to make achievements in this new continent, striving to become the Chinese version of Open AI.

Alibaba took the lead in investing in our country's largest model AI unicorn - MiniMax.

Although the specific amount raised has not been announced to the outside world, insiders have revealed that it will definitely be no less than $600 million. Once this fund is in place, MiniMax's valuation should exceed $2.5 billion, which is approximately 18 billion yuan.

This is another big move by Alibaba in the AI field since the beginning of 2024. Recall that Alibaba previously invested in another AI company, the Dark Side of the Moon, and they raised a total of $1 billion in that round.

Of course, Alibaba also knows the principle that eggs cannot be put in one basket. Alibaba has also chosen to invest in well-known large model AI companies such as Zero One Everything, Baichuan Intelligence, and ZhiPu AI.

Alibaba's AI strategy is both internal and external. It is not only about increasing efforts in the development and open source work of large models internally, but also not relaxing externally. They invest in emerging AI startups, cooperate closely with them, and together promote the growth of the large model ecosystem, paving the way for the future of Alibaba Cloud.

This investment strategy has a certain tacit understanding with the tech giant Microsoft. As we mentioned earlier, Microsoft has invested more than $13 billion in Open AI since 2023 and provided strong computing power support in exchange for priority use and commercial authorization.On Alibaba's side, they have also been deeply collaborating with emerging AI companies such as Zero One Infinity and Baichuan Intelligence, with Alibaba Cloud providing them with computational power and platform support.

Alibaba cleverly leverages its advantages in the internet domain, employing a strategy that refines both internal and external capabilities, and is fully committed to entering the AI field.

To promote the healthy development of China's new generation of artificial intelligence, on one hand, we need to face and resolve challenges in hardware infrastructure, algorithms, and applications.

On the other hand, we must also encourage private enterprises to increase their investment, enhance their independent innovation capabilities, complete resource integration, and strengthen international cooperation and exchanges. Through these measures, we can gradually overcome these difficulties and promote the continuous development and progress of China's artificial intelligence technology.