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The Chinese behemoth said it was testing an artificial intelligence-powered chatbot internally. It did not share details of when it would launch or what the application would be called.
"Frontier innovations such as large language models and generative AI have been our [focus] areas since the formation of DAMO in 2017," an Alibaba (BABA) spokesperson told CNN in a Thursday statement, referring to an acronym for the company's research arm that focuses on machine intelligence, data computing and robotics.
"As a technology leader, we will continue to invest in turning cutting-edge innovations into value-added applications for our customers as well as their end-users."
Alibaba's Hong Kong-listed shares ticked up 1.4% on Thursday morning.
Companies around the world are racing to develop and release their own versions of ChatGPT, the application that allows users to automatically write essays or pass tests.
The tool is built on a large language model, which is trained on vast troves of data online in order to generate compelling responses to user prompts. Experts have long warned that these tools have the potential to spread inaccurate information.
This week, Google (GOOGL) and Chinese search engine giant Baidu (BIDU) both unveiled plans to launch similar services of their own.
Google's tool, named "Bard," will roll out to the public in the coming weeks, while Baidu's bot, called "Wenxin Yiyan" in Chinese or "ERNIE Bot" in English, will launch in March.
Bard suffered an embarrassing setback this week, however, after producing an incorrect response during a public demonstration.
Shares in Google's parent company, Alphabet, fell nearly 8% Wednesday following the news.
Microsoft (MSFT), too, has gotten in the game. The firm announced a makeover for its Bing search engine on Tuesday, saying it would update the platform to answer questions, chat with users and produce content in response to prompts using artificial intelligence.
The company is also investing billions of dollars in OpenAI, the company behind ChatGPT.
— CNN's Catherine Thorbecke contributed to this report.
Alibaba said it is working on a rival to ChatGPT, the artificial intelligence chatbot that has caused excitement across the world. Alibaba said its own product is currently undergoing internal testing.
Kuang Da | Visual China Group | Getty Images
Chinese e-commerce giant Alibaba told CNBC Wednesday that it is working on a rival to ChatGPT, joining the flurry of tech firms to jump on board the chatbot hype.
A company spokesperson said the company is working on a ChatGPT-style of technology and it is currently being tested internally at the firm.
Alibaba shares jumped 3% in pre-market trade in the U.S.
The move comes as tech companies globally look to jump on the excitement generated by ChatGPT, an artificial intelligence chatbot created by OpenAI. Users can ask ChatGPT questions on a wide variety of topics, write essays and even generate code.
ChatGPT falls into the category of generative AI, a type of artificial intelligence that can be used to create text or images. It is powered by a large language model, meaning it uses large swathes of data to understand and generate conversation.
Alibaba said it has been working on generative AI since 2017. The company did not provide a timeline for when it could launch its ChatGPT rival.
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ChatGPT has sparked somewhat of an AI arms race among the world's biggest tech players. Microsoft invested in OpenAI and this week announced an AI-powered Bing search engine and Edge browser, which will be underpinned by ChatGPT technology.
Also this week, Google announced its artificial intelligence chatbot technology called Bard, as part of a "code red" plan to respond to the challenge posed by ChatGPT.
Chinese search giant Baidu said this week it is testing its own chatbot called "Ernie bot" in English or "Wenxin Yiyan" in Chinese. The announcement sent shares skyrocketing, highlighting investor excitement over the technology.
Alibaba, one of China's biggest cloud computing players and the country's biggest e-commerce company, hinted that its own chatbot could be integrated into its products.
"As a technology leader, we will continue to invest in turning cutting-edge innovations into value-added applications for our customers as well as their end-users through cloud services," an Alibaba spokesperson told CNBC.
On Wednesday, NetEase, one of China's largest gaming firms, said that its education subsidiary Youdao has been working on generative AI. A spokesperson told CNBC that the company is looking at using large language models in some of its education productions.
NetEase did not say it would launch a ChatGPT rival. It disclosed that some of its new products will be announced soon, but did not provide a specific timeline.
Alibaba's (BABA -3.01%) stock is up more than 20% this year as China relaxed the zero-COVID restrictions that were throttling its economic growth. Is it too late to buy Alibaba right now, or does it still have more room to run this year?
Why did Alibaba's stock initially collapse?
Alibaba's stock closed at its all-time high of $317.14 on Oct. 27, 2020. At the time, many investors considered it to be a solid long-term investment because it was China's largest e-commerce and cloud platform company.
But two years later, Alibaba's stock dropped below its IPO price of $68. That collapse was caused by a painful streak of regulatory, macroeconomic, and competitive challenges.
Image source: Alibaba.
First, Alibaba was hit by an antitrust probe in China, which resulted in a $2.75 billion fine and new restrictions on its e-commerce business. The Chinese government also fined Alibaba for its previously unapproved investments and acquisitions, and it indefinitely suspended the IPO of Alibaba's fintech affiliate Ant Group. U.S. regulators also threatened to delist shares of Chinese companies if they didn't open their books to independent auditors.
Meanwhile, China's economic growth cooled off, and that slowdown was exacerbated by the unpredictable zero-COVID lockdowns. The government-imposed restrictions on Alibaba's e-commerce business -- which barred its exclusive deals with merchants and excessive promotions -- also made it easier for smaller e-commerce players like JD.com (JD -2.00%) and Pinduoduo (PDD -3.48%) to catch up. The growth of Alibaba Cloud also decelerated amid those macro headwinds.
All those headwinds made Alibaba a tough stock to love. In fiscal 2021 (which ended on March 31, 2021), its revenue and adjusted earnings per share (EPS) rose 41% and 23%, respectively. But in fiscal 2022, its revenue only grew 19% as its adjusted EPS dropped 19%. For fiscal 2023, analysts expect its revenue and adjusted EPS to rise 10% and 6%, respectively.
Are Alibaba's valuations still attractive?
Alibaba's high-growth days might be over, but its stock looks cheap at 12 times forward earnings. JD.com and Pinduoduo, which are both growing faster than Alibaba, trade at 20 and 22 times forward earnings, respectively.
Alibaba's stock is still trading at a discount because the regulatory headwinds haven't fully dissipated yet. Over the past few months, the Chinese government acquired "golden shares" (which have special voting and veto rights) in two of Alibaba's domestic businesses -- Youku Tudou's film and TV unit, and a research and development division called Guangzhou Lujiao. That creeping influence indicates the Chinese government still plans to tighten its grip on Alibaba's sprawling digital ecosystem.
The Biden administration's ban on all advanced chip sales to China, which took effect last October, also barred Alibaba from licensing new Arm-based server chip designs from SoftBank's (SFTB.Y -1.75%) Arm Holdings. Those restrictions could potentially curb the growth of Alibaba's cloud business and reduce the effectiveness of its artificial intelligence algorithms.
As for the delisting threats in the U.S., they still haven't been resolved, even though China started to allow American regulators to review Chinese audits of those companies last December. That falls short of the Public Company Accounting Oversight Board's demand for unrestricted access, so Alibaba and its peers could still be delisted if a deal isn't reached.
But don't overlook its other near-term problems
Even if we look past all those regulatory challenges, Alibaba's near-term prospects look grim. Its sales during Singles Day in 2022 -- the Chinese equivalent to Black Friday, which occurs around Nov. 11 -- stayed roughly flat from the previous year. JD's and Pinduoduo's superior growth also suggests that many of Alibaba's wounds were either self-inflicted or caused by the government, instead of the broader macroeconomic and COVID-related headwinds.
As the growth of Alibaba's Chinese commerce business decelerates, it's relying more on its lower-margin businesses -- including its direct sales platforms, logistics network, brick-and-mortar stores, and overseas marketplaces (including Lazada and Trendyol) -- to drive its sales growth. That's worrisome because Alibaba generates all of its profits from its commerce segment -- which in turn subsidizes the expansion of its unprofitable cloud, digital media, and innovation initiatives divisions.
After taking all these issues into account, I simply can't recommend buying Alibaba as a post-COVID reopening play in China. If you want some exposure to that same trend, Pinduoduo -- which is better streamlined than Alibaba and faces fewer regulatory headwinds -- would arguably be a much better play.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends JD.com. The Motley Fool has a disclosure policy.
This copy is for your personal, non-commercial use only. To order presentation-ready copies for distribution to your colleagues, clients or customers visit http://www.djreprints.com.
https://www.barrons.com/articles/alibaba-microsoft-google-baidu-ai-chatgpt-51675866207
SHANGHAI, Feb 8 (Reuters) - Alibaba Group (9988.HK), on Wednesday said it is developing a ChatGPT-style tool that is currently in internal testing, joining a race by tech companies globally to show they are up to speed on generative artificial intelligence (AI) developments.
The Chinese e-commerce group's statement came after the 21st Century Herald newspaper reported that Alibaba is developing a ChatGPT-like dialogue robot which is currently open to employees for testing.
When asked about the newspaper report, which also said that Alibaba might combine the technology with the group’s communication app DingTalk, Alibaba declined to comment.
The company said it had been focused on large language models and generative AI for a number of years. Large language models are natural language processing systems which are trained on massive volumes of text, and are capable of answering and comprehending questions as well as generating new text.
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Alibaba's U.S.-listed shares rose 3.2% premarket after the news.
Shares in a number of other Chinese AI technology companies have soared in the past few days due to investor excitement over Open.Ai's ChatGPT, which can generate articles, essays and jokes in response to prompts and has been rated the fastest-growing consumer app in history.
Shares in Chinese search engine giant Baidu (9988.HK) jumped by 15% on Tuesday after it said it planned to complete testing of its "Ernie bot" in March. Google owner Alphabet Inc (GOOGL.O) is also planning its own chatbot service and said it will use more artificial intelligence for its search engine.
Microsoft (MSFT.O), which owns Open.AI, plans to tie ChatGPT in with its search engine Bing.
On Wednesday, another Chinese tech group JD.com (9618.HK), said it was looking to integrate some methods and technology similar to ChatGPT's into some of its products, such as its e-commerce platform's customer service.
A source familiar with NetEase (9999.HK), told Reuters that the Chinese gaming company plans to deploy similar large language models technology to serve its education business.
Reporting by Josh Horwitz and Brenda Goh in Shanghai; Additional reporting by Twinnie Siu and Josh Ye in Hong Kong, Sophie Yu in Beijing; editing by Jason Neely, Louise Heavens and Jane Merriman
Our Standards: The Thomson Reuters Trust Principles.
At this point, Apple might as well just go ahead and announce it is working on a ChatGPT rival.
As reported by CNBC, Alibaba, the Chinese technology giant Alibaba has announced that it is working on its own competitor to ChatGPT, the conversational AI developed by OpenAI that has taken the tech industry by storm over the last few months.
Chinese e-commerce giant Alibaba told CNBC Wednesday that it is working on a rival to ChatGPT, joining the flurry of tech firms to jump on board the chatbot hype. A company spokesperson said the company is working on a ChatGPT-style of technology and it is currently being tested internally at the firm.
While Alibaba says that the technology has been in development since 2017 and testing is already being done internally at the company, it would not tell the outlet when users can actually expect to get their hands on the product.
A spokesperson for the company said that “as a technology leader, we will continue to invest in turning cutting-edge innovations into value-added applications for our customers as well as their end-users through cloud services.”
Alibaba is the latest tech giant to wade into the AI wars that are starting to heat up. Just this week, both Microsoft and Google held events to showcase their advancements in artificial intelligence. For Microsoft, the company announced a brand new version of Bing, the company’s search engine, and Edge, its web browser. Both new versions incorporate the next generation of GPT, Open AI’s conversational AI technology.
Google, on the other hand, announced some notable AI updates to both search and maps. It also revealed Bard a few days ago, the company’s competitor to the new version of Bing. The first demo of Google’s AI chatbot, however, contained a pretty embarrassing error when it said the James Webb Space Telescope was the first to discover planets outside of our solar system. That’s incorrect.
The AI wars are here!
ChatGPT has created a sudden fervor for conversational AI in the tech industry, and everyone wants to be the master of it. Alibaba is the latest company to enter this race. The Chinese tech giant is reportedly conducting internal testing of its ChatGPT competitor. It hasn’t officially announced a launch date for the solution, which doesn’t yet have a name, at least not known to the public.
A spokesperson for Alibaba told the popular Chinese publication South China Morning Post, which Alibaba acquired for a reported fee of $266 million in December 2015, that the company is internally testing its conversational AI chatbot in Damo Academy. It is an Alibaba-owned research institute located at Nanhu Science Centre in Hangzhou city. Established in 2017, the 228,100 sq. meter site is dedicated to research programs in cutting-edge technologies, including AI.
According to South China Morning Post, Damo Academy introduced a natural language processing model with 27 billion “parameters” in April 2021. These parameters are a measurement of an AI chatbot’s capabilities. ChatGPT is built on top of OpenAI’s GPT-3 (Generative Pre-trained Transformer 3) family of large language models that was launched in 2020 with 175 billion parameters. So Alibaba’s solution is a lot less capable as things stand.
However, the company is still developing its conversational AI. By the time it arrives in the market, the company may Boost it a lot. Damo Academy has already announced a new “M6” AI model known labeling it as the world’s first “10-trillion-parameter” pre-training model. It’s unclear whether this model is ready for prime time yet. We should hear more about Alibaba’s ChatGPT competitor in the coming months as the company progresses with its development.
OpenAI launched ChatGPT on November 30 last year. In two months, the service raked in more than 100 million users globally. More than the popularity of the conversational AI chatbot, it’s its capabilities that have put established tech companies on their toes. Many see it as the future of search. Google, being the world’s largest search company, quickly got working and launched Bard a few days back. The service is currently in closed beta but will be available to the public in the coming weeks.
Chinese search giant Baidu has also announced its ChatGPT competitor. Called the Ernie Bot, the company plans to launch the service next month. Other Chinese firms working on AI chatbots include Tencent Holdings, JD.com, and NetEase. Google’s Bard made a costly mistake (a factual error) during its first demo, costing the company $100 billion in market value. It appears there’s still plenty of work to do for the search giant. It will be interesting to see how this market shapes up over the next few months.
Alibaba.com Singapore E-commerce Private Ltd sold 21.43 million shares of One 97 Communications, the parent company of Paytm, at 642.74 rupees apiece, according to Friday data from India's National Stock Exchange (NSE). The deal is worth about 13.77 billion rupees ($167 million), according to CNN calculations.
In January, Alibaba sold about 3% of Paytm for $125 million, cutting its holdings from 6.26%, based on NSE data.
With Friday's deal, it has sold its entire direct stake in Paytm.
Shares in One 97 Communications plunged nearly 8% on Friday. It bounced back slightly on Monday morning. Alibaba and Paytm didn't immediately respond to CNN's request for comment.
'India's Alipay'
Founded in 2010, Paytm is India's largest payment platform, with more than 300 million registered customers and over 20 million merchants. It's backed by big name investors such as Ant Group, an affiliate of Alibaba, Softbank (SFTBF) and Warrent Buffet's Berkshire Hathaway (BRKA).
Alibaba and Ant Group together made a "strategic" investment in Paytm in September 2015, in an extension of the initial investment made by Ant in February of that year.
At that point, Alibaba said the investment would enhance its ability to tap opportunities in India's fast-growing mobile commerce market and digital finance industry. Paytm and Ant Group had been working on "synergies" since Ant made the initial investment, the company said.
Ant Group, which operates China's leading digital payment app Alipay, remains Paytm's largest shareholder with a 25% stake, according to the most accurate data from Refinitiv Eikon.
Alibaba has gradually exited its investments in India, after New Delhi imposed restrictions in 2020 that made it difficult for Chinese investors to invest in Indian firms.
China and India share a disputed border that has long been the source of friction between New Delhi and Beijing, with tensions escalating sharply in June 2020, when hand-to-hand fighting between the two sides in the Himalayas resulted in the deaths of at least 20 Indian and four Chinese soldiers.
Last December, Indian and Chinese troops clashed again along the border, which at the time was the first known incident between the two nuclear-armed Asian powers in nearly two years — though video later emerged suggesting a previously unreported clash occurred in 2021.
In early 2021, Alibaba sold a major stake in BigBasket, an online grocery retailer, to Indian conglomerate Tata Group. In May 2022, Alibaba and Ant Group offloaded their entire stake in Paytm Mall, the e-commerce platform of Paytm. In November 2022, Ant Group reportedly sold a stake of about 3% in Zomato for $200 million, according to Reuters.
Alibaba itself has also been under pressure from domestic regulatory crackdowns and economic headwinds. A government campaign aimed at reining in the country's technology giants, coupled with a weak economy, has sharply slowed sales growth at the company, battered its share price and made business expansion more difficult.
Last year, Alibaba posted flat revenue growth for the first time since going public in 2014.
CNN's Simone McCarthy contributed to this report.
If it seems like everyone is rushing to develop an alternative to ChatGPT, you're not wrong. Chinese online commerce heavyweight Alibaba has confirmed to CNBC that it's working on its equivalent to OpenAI's hit AI chatbot. The company isn't detailing features or offering a release schedule, but says it has been developing generative AI since 2017 and is in the middle of internal testing.
The reveal comes as multiple tech giants have introduced rivals to or spinoffs of ChatGPT this week. Google unveiled Bard, while China's Baidu said it was testing "Ernie Bot." Microsoft, meanwhile, launched a redesigned Bing that uses a "much more powerful" language model built with OpenAI's help. The text-generating AI is considered particularly useful for search, where it can provide detailed responses to very specific questions.
Alibaba hasn't said how it would put the AI to work. However, the company is a powerhouse in online shopping and has its fingers in numerous other fields ranging from cloud computing through to finance. A counterpart to ChatGPT could be useful in many of these categories, and might help Alibaba challenge Baidu and other Chinese firms hoping to wield AI as a competitive advantage.
- Alibaba is testing a rival to ChatGPT, according to reports, as tech firms race to tap into the frenzy around the AI tool.
- Microsoft, Alphabet and Baidu are also looking into the technology.
- The Chinese e-commerce giant said its AI chatbot could be integrated into its products.
Chinese e-commerce giant Alibaba is testing its own rival to ChatGPT, joining the tech race to tap into investors' frenzy over artificial intelligence products.
The multinational tech company said Wednesday that it has been working on its own AI chatbot currently being tested at its firm, according to a CNBC report.
Generative intelligence and large language models have been the Chinese tech giant's focus since the founding of its AI research arm in 2017, the company said on Wednesday, though it didn't specify when exactly it plans to roll out the chatbot tool.
Alibaba is one of the latest tech companies to start working on a rival to ChatGPT, OpenAI's tool that can do anything from writing cover letters, come up with dating app messages, and provide generic investing advice. Microsoft's stock soared after it said it would invest an additional $10 billion into OpenAI in January. Google parent Alphabet and Chinese search-engine giant Baidu are also taking part in this so-called AI arms race to the top.
Investors' excitement around the new tech advancement hasn't gone unnoticed. The latest AI stock boom has boosted the value of a string of companies, from AI provider C3.ai to Buzzfeed, who have jumped on the ChatGPT bandwagon in one way or another. They're either coming up with their own chatbot versions or incorporating the AI language tool into their products.
Alibaba's shares listed on the Hong Stock exchange rose nearly 4% on Thursday to 107.60 HKD.
