Alibaba Cloud Joins Forces With Ex-Google Exec's Unicorn To Boost AI Models

Chinese e-commerce juggernaut Alibaba Group Holding’s BABA cloud unit is partnering with Beijing-based startup 01.AI to develop artificial intelligence (AI) models.

Alibaba Cloud aims to set up an industrial large model laboratory to create large model solutions for business clients, according to South China Morning Post.

01.AI, founded in May 2023 by former Alphabet Inc GOOG GOOGL Google China head Lee Kai-fu, reached a valuation of $1 billion in just six months.

Also Read: Sam Altman’s OpenAI Plans Major Revamp Of Corporate Structure

Alibaba Cloud’s partnership coincided with price wars in the domestic market, which prompted companies to offer further discounts or collaborate with former rivals.

Also this week, Alibaba Cloud agreed to offer up to 85% discounts for its visual reasoning AI model, marking its third discount for the year.

In December, TikTok parent ByteDance agreed to offer a discount on its visual model that was 85% below the industry average.

Meanwhile, Alibaba split up its AI team, with one focusing on developing applications for the AI chatbot Tongyi Qianwen and the other in charge of the underlying LLM. Wedbush’s Dan Ives expects the U.S. Big Techs to incur $1 trillion on AI capital expenditure.

Alibaba Group Holding stock surged over 11% in the last 12 months. The company reported second-quarter 2024 revenue growth of 5% to $33.70 billion, beating the consensus estimate of $33.47 billion. Adjusted earnings per ADS of $2.15 missed the analyst estimate of $2.26. Cloud Intelligence Group revenue grew by 7% to $4.22 billion, driven by the double-digit revenue growth of public cloud products, including AI-related products.

Investors can gain exposure to Alibaba through Invesco Golden Dragon China ETF PGJ and ProShares Online Retail ETF ONLN.

Price Action: Alibaba stock is up 0.11% at $85.05 at the last check Friday.

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