Alibaba Group Holding Limited
The strategy aims to establish the e-commerce giant as a leader in the AI sector, similar to Microsoft Corp's
The company has invested in several prominent start-ups, such as Moonshot, Zhipu, MiniMax, and 01.ai, developing local versions of popular U.S. applications like ChatGPT.
Despite sluggish growth since Beijing's crackdown on large internet firms, Alibaba's cloud arm is seeking new revenue by offering its computing resources to train AI models.
This investment strategy mirrors those of Microsoft and Amazon.Com Inc
However, unlike these U.S. companies, Alibaba retains the funds in an escrow account, treating them as incoming revenue. This computing-for-equity approach is precious in China, where cloud resources are scarce due to U.S. export restrictions on advanced chips.
Alibaba's commitment to AI extends to monetizing its inventory of AI chips, which includes significant orders of Nvidia Corp
Last week, Alibaba launched the latest version of its large language model, Qwen2.5, which it claimed to beat OpenAI's GPT-4 in language skills.
Alibaba stock lost over 9% in the last 12 months. Investors can gain exposure to the stock via Invesco Golden Dragon China ETF
Price Action: BABA shares are trading higher by 3.50% at $82.84 premarket at the last check on Monday.