Tsai talks, Alibaba regroups around open-source AI
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Investing.com -- Alibaba Group (NYSE:BABA) is working to reestablish its leadership within China’s tech sector, turning to artificial intelligence and cloud infrastructure as key pillars of its strategy. Chairman Joe Tsai has signaled a more focused direction after a period marked by regulatory challenges, market pressures, and internal overreach.
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Speaking at the VivaTech conference in Paris, Tsai acknowledged past missteps while outlining a course correction. “I think I saw a company that kind of lost its direction a little bit. I think we have expanded too big,” he said, referencing his return to active leadership in mid-2023.
A notable inflection point came earlier this year when AI startup DeepSeek launched a new reasoning model that caught major players off guard. “We read the research papers and we said, ‘Holy cow, how come we have fallen behind? We were doing the same things,’” Tsai said, describing how the event prompted an accelerated internal response.
As Chinese New Year approached, Alibaba engineers were directed to stay on-site and increase their development pace. “Our engineering lead decided and said, ‘Cancel your Chinese New Year holiday, everybody stay in the company, sleep in the office, we’re gonna accelerate our development,’” Tsai said. That sprint led to new releases in the Qwen model series, now among the top open-source LLMs globally.
For Alibaba, the episode reinforced the need to operate with urgency and tighter alignment between research and deployment. The company has committed more than 380 billion yuan ($53 billion) over the next three years to expand its AI infrastructure and improve training and inference capabilities tied to Alibaba Cloud.
Alibaba’s strategy hinges on supporting open-source model development while driving commercial demand for cloud services. By making core models available to developers, the company aims to build ecosystem momentum while leveraging its backend infrastructure as a commercial gateway.
Although broader macroeconomic conditions remain a challenge inside China, Alibaba’s approach reflects a move to consolidate around core strengths rather than seek expansion for its own sake. The recent AI efforts suggest management is focused on rebuilding competitive positioning with a clearer set of priorities.
By pairing scale with more deliberate execution, Alibaba is positioning itself for the next phase of China’s tech evolution. The landscape remains highly competitive, but the company appears better equipped to respond than in prior cycles. Alibaba stock is down 1.2% today, as of 12:50 ET.