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China's Tech Giants Alibaba and NetEase Bet on AI Amid Trade Restrictions

Updated: Jan 5

Chinese tech giants, Alibaba and NetEase, double down on artificial intelligence (AI) while navigating trade restrictions and seeking regional backing.

Credits: EPA

Alibaba Group Holding and NetEase, prominent Chinese Big Tech firms from Zhejiang province, are banking on the future of artificial intelligence (AI) despite trade restrictions on chips and potential curbs on cloud computing services imposed by the United States, reported by Zhejiang Daily newspaper.

Daniel Zhang Yong, Alibaba's current chairman and CEO, stated that cloud computing is crucial for training large language models (LLMs). Zhang emphasised that leading internet players are rapidly developing LLMs, with the convergence of new technologies and the platform economy model offering opportunities for fresh advancements.

NetEase's founder and CEO, William Ding Lei, announced that his company will allocate a minimum of 10 billion yuan ($1.38 billion) annually to address AI "choke points," including algorithms and chips for large models. Ding aspires to build a cutting-edge AI system that is entirely self-developed, aiming to compete with or surpass international rivals.

These announcements were made during a conference held by the provincial government, dedicated to promoting the growth of internet platforms like Alibaba and NetEase. The South China Morning Post is under Alibaba's ownership.

Zhejiang has become the first province in China to introduce a specific local policy guideline to support Big Tech companies. The provincial authority has partnered with the State Administration for Market Regulation, the central agency that previously fined Alibaba a record 18.2 billion yuan for monopolistic practices, to provide assistance to internet platforms based in Zhejiang.

After a prolonged crackdown on China's dominant tech players, the platform economy is now being bolstered by the Chinese government. However, Chinese tech firms face fresh challenges as the Biden administration considers restrictions on Chinese customers' access to US cloud computing services utilising advanced AI chips. Both Alibaba and NetEase express confidence in the support they will receive from authorities in Beijing and Zhejiang to realize their AI ambitions.

Alibaba's chairman position will be succeeded by Joe Tsai, the current executive vice-chairman, while Eddie Wu Yongming, chairman of Taobao & Tmall Group, will assume the CEO role.

Alibaba, headquartered in Hangzhou, the capital of Zhejiang, plans to leverage the province's advantages and continue investing in e-commerce, logistics and cloud computing amidst fierce global competition.

Ding highlighted that Chinese companies can no longer rely solely on products and marketing for overseas expansion and competitive advantage in terms of cost and time to market. They must now focus on technology and ecosystem development to stay ahead.

  • Alibaba and NetEase are betting on AI despite US trade restrictions on chips and potential cloud computing curbs.

  • Cloud computing forms the foundation of large language models (LLMs), according to Alibaba's chairman, Daniel Zhang Yong.

  • NetEase plans to invest 10 billion yuan annually to overcome AI challenges and aims to develop a state-of-the-art self-developed AI system.

Source: SCMP

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