Alibaba Group Holding Ltd BABA spearheaded the most significant financing round in a Chinese artificial intelligence startup, showcasing its renewed focus on growth through substantial investments.
The e-commerce giant led a $1 billion investment in Moonshot AI alongside existing investor Monolith Management, significantly increasing the startup’s value to approximately $2.5 billion.
This move places Alibaba among other significant players like Tencent Holdings Ltd TCEHY and Microsoft Corp MSFT, splurging in generative AI technologies such as those behind ChatGPT, Bloomberg reports.
Moonshot AI, founded in March 2023 and known for its generative AI development in China, aims to rival entities like OpenAI and Alphabet Inc GOOG GOOGL Google.
Following the launch of its Kimi chatbot and a developer platform for AI applications, its valuation skyrocketed from $300 million to $2.5 billion.
Alibaba’s leadership under Joseph Tsai and Eddie Wu is focused on revitalizing the company through investments in AI and other technologies amidst challenges like regulatory scrutiny and economic downturns. Tsai highlighted the cloud division’s role in hosting many of China’s generative AI firms.
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Alibaba stock lost over 15% in stock value last year as it struggled with its organizational and management restructuring to unlock shareholder value while the domestic economy played a spoilsport. Microsoft gained 63% courtesy of the AI frenzy.
Also this week, Alibaba disclosed more Chinese government ownership within its units than previously known in response to a U.S. Securities and Exchange Commission (SEC) inquiry.
The Hangzhou-based company revealed in recent U.S. and Hong Kong filings that state-owned enterprises and foreign sovereign wealth funds have stakes in many parts of its conglomerate amidst China’s Communist Party’s plans to shape the nation’s technology sector significantly.
This admission follows significant antitrust fines imposed on Alibaba and its fintech affiliate Ant Group, highlighting the Chinese government’s increasing “golden shares” influence on major tech companies. Alibaba aims to rejuvenate its diverse business operations under CEO Eddie Wu’s leadership.
Price Action: BABA shares closed higher by 0.72% at $76.51 on Monday.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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