Last week, the US investment bank JPMorgan Chase held the 20th Global China Summit in Shanghai. Alibaba Group Chairman Cai Chongxin had a wonderful conversation with the bank's North Asia Chairman and Vice Chairman of Investment Banking in Greater China, Kam Shing Kwang.
In the eyes of the outside world, Alibaba has undoubtedly been an active explorer and investor in the field of generative artificial intelligence. What role will artificial intelligence play globally in the coming years? Why is Alibaba fully committed to developing artificial intelligence?
"When you come to a fork in the road, take it." In the conversation, Cai Chongxin borrowed a famous quote from Yogi Berra to discuss how Alibaba will seize the value and opportunities brought by artificial intelligence, and shared Alibaba's strategic focus and future vision goals after self transformation.
The process of training AI models is like educating children
In the next decade, no industry will be immune to the disruption brought by AI. How to understand artificial intelligence?
"Today's artificial intelligence is very focused on big language models. These models attempt to simulate the human brain to achieve machine intelligence that is close to human intelligence." Cai Chongxin gave an example, and the process of training AI models is like educating children, from middle school to high school, then to university, or ultimately obtaining multiple doctoral degrees, which is similar to what is happening in big language model competitions. When people talk about the "degree" of big models, they are actually comparing the depth and breadth of their respective technologies, which is like "my child has three doctoral degrees, proficient in biology, mathematics, and psychology.".
"If we understand the training of artificial intelligence and machine intelligence from the perspective of educating children, we will realize that it takes 22 years to cultivate a child to graduate from university, and in just three or four years, the big language model has reached the level of human knowledge and certain mathematical calculations, even reaching the level of a doctoral student in some aspects." Cai Chongxin said that the speed of this progress is incredible.
Considered as the most powerful variable for changing and accelerating business growth, how will artificial intelligence develop?
Cai Chongxin explained that Alibaba participates in the development of artificial intelligence in three ways. "Firstly, as a technology company and explorer, Alibaba firmly believes that artificial intelligence will continue to progress and become increasingly intelligent in the future. It firmly believes in the ideal prospect of AGI's continuous development, and therefore, out of pure technological ideals, continuously strives for it."
He added that data is to machines what food and books are to humans, the key to growth and progress. By continuously increasing data resources and computing power, the performance improvement of large models shows a super linear growth trend. Alibaba has also reached a new height in the research and development of AI products. For example, Alibaba has developed the big language model "Tongyi Qianwen", which is one of the leading big models in the Chinese market.
Secondly, Alibaba also has a thriving cloud computing business, and the deep integration of cloud computing and artificial intelligence is very important, which will help promote the growth of cloud computing revenue. Cai Chongxin emphasized, "Alibaba is actually one of the very few companies that has both internal artificial intelligence capabilities and cloud business."
Thirdly, he further gave examples: Microsoft and OpenAI are two independent companies, Amazon has cloud business but does not have its own big language model and artificial intelligence, Meta has big language model but does not have cloud business, and the only American company with both internal artificial intelligence and cloud computing business is Google, but people often do not consider its AI capabilities to be leading. In China, Alibaba is the only company that has both a leading cloud business and competitiveness in the field of artificial intelligence. The demand for artificial intelligence will lead to an increase in computing power demand, thereby driving the growth of cloud computing business. In the recently disclosed financial report of Alibaba for the previous quarter, AI related revenue in the cloud business achieved a three digit year-on-year growth.
The third way for Alibaba to participate in AI is to apply AI to numerous vertical applications and rich scenarios. Cai Chongxin stated that all scenarios can create greater value through artificial intelligence. He gave an example of the application of artificial intelligence in e-commerce scenarios: it can provide consumers with more accurate recommendation guidelines, simulate the upper body effect of clothing, and serve as a personal assistant and customer service representative, providing timely and thoughtful services
"We have seen the enormous potential of artificial intelligence, which is why we are fully committed to investing." When asked about Alibaba's investment in other big language models, Cai Chongxin said that whether developing proprietary technology, open source, or investing in other companies, it is because artificial intelligence is a very important field, and its development path is not a one-way street (you cannot just take one path).
Focusing on core business and adhering to long-term principles
"Always focus on the future" and "In the next 10 years, once again see yourself as a startup". Since September last year, Alibaba has undergone comprehensive self reform. In this process, Alibaba is making continuous efforts to reignite its entrepreneurial passion and imagination.
On May 23rd, Alibaba released its 2024 annual report, while Cai Chongxin and Wu Yongming released their first jointly signed letter to shareholders. The letter elaborates on "who Alibaba is" and why it clearly defines the strategic direction of "user first, AI driven".
In the conversation, when asked how to view the development status of Alibaba, Cai Chongxin emphasized that the company's management is extremely focused and has a clear strategic focus - focusing on core business, growth, technological innovation, and the application of technology in core business, in order to create value for users and shareholders. When it comes to competition, Cai Chongxin said that competition is a norm and has been in competition since the establishment of Alibaba. "When competing, it is necessary to maintain a growth mindset, which is the philosophy that Alibaba is currently adhering to."
When it comes to expectations and vision goals for the future, he once again emphasized that Alibaba always focuses on growth. In the annual report to shareholders letter, Alibaba also stated that in the future, it will continue to invest in two major areas: first, accelerating core business growth, and second, maintaining the leading position in basic technology and innovation, including AI.
"Today at Alibaba, our internal message to employees is that we will focus on two core businesses: e-commerce and cloud computing." He also revealed Alibaba's future growth goals, "with a three-year planning cycle, we hope to achieve double-digit growth by the end of March 2027 fiscal year."