Alibaba to invest $15bn in R&D labs in push to become AI leader

Financial Times | 12 Oct 17

By Louise Lucas in Hong Kong 

Alibaba will invest $15bn in research and development labs and hire a hundred scientists across the tech nexus of the US, China and Israel as it strives to build its clout in artificial intelligence.

Beijing aims for China to be the world leader in AI by 2030, and is putting money and policies behind its ambitions, spooking some observers in the US and Europe who fear their less bountiful government budgets may leave them at a disadvantage.

Alibaba, with its roots in ecommerce, has branched into cloud services and AI applications ranging from targeted ads and shopping choices, to facial recognition. It benefits from data spun out of its businesses in payments, logistics and movies.

Announcing the investment on Alibaba's home turf in Hangzhou, Jeff Zhang, chief technology officer, said the $15bn would be invested over three years as part of a research programme called Alibaba's Academy for Discovery, Adventure, Momentum and Outlook.

The labs will focus on areas including data intelligence, internet of things, quantum computing and human-machine interaction, Alibaba said.

"The Alibaba DAMO Academy will be at the forefront of developing next-generation technology that will spur the growth of Alibaba and our partners," said Mr Zhang. "We aim to discover breakthrough technologies that will enable greater efficiency, network security and ecosystem synergy for end users and businesses everywhere."

Speaking to the MIT Technology Review, Felix Liu, Alibaba's head of customer experience, said the company began using AI for customer applications two to three years ago.

Now, he said, AI helps all customer inquiries and, in half the cases, resolves them completely. It also spots problems early, for example picking up a logistics snafu by detecting abnormal levels of status inquiries.

By setting up a global network, Alibaba is benefiting from some of the world's top R&D and tech centres, such as Israel and Singapore.

Assuming an annual R&D spend of $5bn, the investment represents about 14 per cent of Alibaba's projected annual sales. In absolute amounts, Volkswagen, the German automaker, last year topped an EU ranking of top R&D spenders with a €13.6bn research budget, followed by South Korea's Samsung with €12.5bn. US tech companies Intel, Alphabet and Microsoft ranked next at €11.0bn apiece.

Alibaba billed the move as another step towards its goal of serving 2bn customers and creating 100m jobs in 20 years. It has about 25,000 engineers and scientists.

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