Alibaba CEO Eddie Wu Sees 'Very Strong Potential' In AI-Driven Synergies Between Cloud And E-Commerce Units

During the fourth quarter 2023 earnings call conference, Alibaba Group Holding Ltd BABA CEO Eddie Wu highlighted the potential for significant improvements in search conversion and ad monetization through AI.

What Happened: During the call, Wu, who also serves as the chairman of the Taobao and Tmall Group or TTG, was asked about the potential synergies between the cloud and e-commerce units and the role of AI in customer relationship management.

Wu acknowledged the strong potential for greater synergy between Alibaba Cloud and TTG, mainly driven by AI. He mentioned the ongoing development of a large language model called Tongyi Qianwen and testing ways to leverage AI capabilities to enhance search and advertising.

 See Also: Alibaba Earnings: Can Q4 Earnings Provide Pivot Point For Beleaguered Investors?

"I see very strong potential for greater synergy between Alibaba Cloud and the Taobao and Tmall Group, especially driven by AI. As you know, we’ve been developing our own large language model called Tongyi Qianwen, and we’re currently testing ways to leverage this model, to leverage the AI capabilities to enhance search and to enhance advertising as well," he said.

Adding, “This initiative is still in the early testing phase, but we see very strong potential to leverage AI to significantly enhance search conversion and ad monetization.”

Why It Matters: Alibaba’s Q4 2023 earnings report revealed a 5% year-on-year revenue growth to $36.67 billion, slightly below the consensus of $36.74 billion. 

The adjusted earnings per ADS of $2.67 also missed the consensus of $2.69. 

The Taobao and Tmall Group revenue grew 2% Y/Y to $18.18 billion, the Alibaba International Digital Commerce Group revenue increased by 44% Y/Y to $4.02 billion, and the Local Services Group revenue grew by 13% Y/Y to $2.14 billion.

Photo by zhu difeng on Shutterstock

Check out more of Benzinga’s Consumer Tech coverage by following this link.

Read Next: Alibaba Chairman Says ‘Not In A Hurry’ For Cainiao, Freshippo IPOs Due To ‘Challenging Market Conditions

Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.