Weekend Reading | The AI Battlefield in the Real World: Why are Global Top Enterprises Choosing to Collaborate with Alibaba?

Published 1 month ago• 8 minute read

Source: Hard AI
Author: Little Cat

The ultimate battlefield of AI is not in the ivory tower, but in the lively and vibrant real world.

Recently, Global leading Auto Manufacturers BMW officially announced a strategic cooperation in AI with $Alibaba (BABA.US)$ which undoubtedly is another important acknowledgment of Alibaba's AI technological strength by a leading global company.

At the same time, the three major domestic Telecommunications Operations companies $CHINA MOBILE (00941.HK)$ A strategic cooperation agreement has also been signed with Alibaba, where both sides will jointly build a new ecosystem for the AI industry based on Cloud Computing, computing power, large models, and other new driving forces.

The choices made by these market-leading companies not only reflect a dual recognition of Alibaba's "AI + Cloud Computing" technology strength and business model but also highlight Alibaba's unique value positioning in the era of industry AI.

As these industry leading companies increasingly engage in AI collaborations with Alibaba, the market has higher expectations for the commercialization process of Alibaba's AI. It has been discussed in previous articles that when Alibaba's AI and Cloud Computing capital expenditures (Capex) become a focus in the Capital Markets, China's technology stocks will witness a real AI thematic market.

Now, as more leading companies in various industries begin to implement AI cooperation projects, it marks that commercialization is accelerating, and the logic of Thematic Investment in AI is transitioning from concept to a deeper developmental stage of substance. For Alibaba, the AI-driven strategy and future growth prospects are becoming further clarified.

The reason Alibaba has been able to grow its market share and achieve technological breakthroughs in the AI field, attracting many industry giants, is not a result of overnight success, but rather stems from its long-term technological accumulation and foresight in industry development direction.

The foundation of its AI strength can be summarized as the earliest embrace of open source, unwavering implementation of the "AI + Cloud" strategy, and early and ongoing exploration of large models. This has also translated into three key advantages for Alibaba in the AI field:

First, adherence to open source, promoting the development of the technology ecosystem.
Secondly, AI and Cloud Computing are deeply integrated, forming technical synergy and a growth flywheel.
Thirdly, a wealth of computing resources and data processing capabilities had been accumulated before the arrival of the era of large models.

First, as early as the initial stages of AI technology development, Alibaba demonstrated an open stance, actively participating in the open source community, contributing to and benefiting from the open source ecosystem. Its open source Qwen series of large models, with excellent performance and wide application scenarios, has become one of the largest AI open source model families in the world, with over 100,000 derived models.

Since the beginning of this year, Alibaba has successively released the Qwen2 series models, QwQ-32B inference model, and Wan2.1 video generation model, continuously validating its technological strength. Notably, the Qwen2.5-Max model has performed outstandingly in several benchmark tests, standing alongside leading models like DeepSeek, proving Alibaba's comprehensive strength in AI infrastructure and algorithm development.

Second, at the strategic level, Alibaba had long established the core development direction of 'AI + Cloud', viewing artificial intelligence as the core driving force of its Cloud Computing business. Alibaba Cloud, as a leading Cloud Computing service provider in Asia Pacific, provides strong computing power for the research, training, and inference of AI.

On February 24, after releasing an unexpected Earnings Report showing triple-digit year-on-year growth in AI-related revenue for six consecutive quarters, Alibaba Group CEO Wu Yongming announced an investment of 380 billion yuan over the next three years to upgrade Cloud Computing and AI infrastructure, which is more than twice the total investment in this field over the past decade.

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The explosive growth of AI technology has significantly amplified the importance of Cloud Computing. Holding the position of the fourth largest Cloud Computing provider globally and the largest in Asia, Alibaba not only offers powerful computing support but also continues to make breakthroughs on its self-developed foundational model Qwen. At the same time, Alibaba is focusing more on deep integration with B-end enterprises, constructing a more scenario-based and ecological AI application landscape.

Alibaba's business model has created a closed loop from technology to customers, and from scenarios to models. By collaborating with leading enterprises, Alibaba not only applies AI technology effectively but also uses these scenarios to further optimize model capabilities, creating a virtuous cycle.

Thirdly, Alibaba's AI Global Strategy is expanding from the digital world to the physical world. Just as $NVIDIA (NVDA.US)$CEO Jensen Huang said: The ultimate goal of AI is physical AI, achieving a leap from Software to Hardware and from virtual to reality.

Today, Alibaba's partners include more leaders of the real industries, such as Auto Manufacturers and telecommunications operators. These collaborations represent the best scenarios for the intersection of AI and the physical world. The complex problems in real scenarios continuously drive model evolution, making it more closely aligned with business needs, resulting in a feedback mechanism where customer demands refine AI models.

The evolution of AI models cannot be achieved simply by training behind closed doors without real-world interaction. True progress in AI must grow through the collision with the complex scenarios of the real world.

The recently released Manus agent is a manifestation of this approach. It is capable of understanding complex instructions and autonomously planning and executing tasks, representing the evolution of AI from a single function to comprehensive capabilities. Through deep cooperation with industry partners, Alibaba is accelerating this evolution process.

As capital expenditures increase and large model iterations accelerate, the market focus is shifting. For example, Goldman Sachs pointed out in a recent report that the market will gradually turn its attention to the progress of AI Agents and AI applications.

For Alibaba, the direction of future development is already clear. Looking back at the statements made by Alibaba Group CEO Wu Yongming at the Earnings Conference, he repeatedly emphasized a key term: AGI (Artificial General Intelligence).

In Wu Yongming's view, this is not an unattainable concept but a clear goal of Alibaba's AI strategy: "Our primary goal in the AI strategy is to pursue AGI, this is our first goal, we must continuously strive to break the boundaries of model intelligence capability."

Why does Alibaba insist on prioritizing AGI? Wu Yongming's judgment is very clear: AGI refers to AI's ability to perform over 80% of human work, whether it is physical or mental labor. Currently, half of the GDP spending worldwide is allocated to labor wages.

Once AI really develops to the AGI stage, it means that about half of global economic activities could be fundamentally changed or even replaced by AI. This implies that if AI can truly reach such a level, AI will become the largest industry in the world, far exceeding any business model currently imaginable by humans.

Wu Yongming's perspective actually points out the fundamental logic of Alibaba's insistence on deep cooperation with leading industry clients:

First, achieving AGI cannot be accomplished solely through algorithms or simple technological upgrades; it requires AI to possess a deep understanding of complex real-world scenarios and a wide adaptability. Where does this capability come from? AI can only truly acquire greater generalization abilities when it constantly undergoes refinement and feedback in real industrial environments, facing real complex problems.

It is precisely for this reason that Alibaba actively chooses to deeply cooperate with automotive giants, telecom operators, manufacturing leaders, and other clients. These leading clients belong to industries that represent core components of the economic structure; they have the most real, complex, and diverse actual demands and application scenarios. Through deep integration into these industries, Alibaba's AI models can continually undergo rigorous testing in complex production environments, growing and evolving – this is precisely the necessary path to achieving AGI.

Secondly, to truly achieve "completing over 80% of human capabilities," means that Alibaba's AI cannot only operate in simple scenarios like e-commerce, chatting, or searching. Only by deeply embedding into complex fields like industrial manufacturing and transportation, and collaborating with leading clients, can real-world 'training grounds' be found, allowing Alibaba's AI to gradually approach the 'omnipotent' goal defined by AGI standards.

Wu Yongming also pointed out that in the future, 90% of AI intelligent output (i.e., tokens generated by models) will occur on Cloud Computing networks, which alone can efficiently support such huge computing power and data volume. This further reinforces Alibaba's logic: AI must deeply integrate into Cloud Computing infrastructure, and through AI infrastructure, this capability can be rapidly delivered to application developers worldwide.

Finally, Wu Yongming clearly stated that Alibaba Group's strategic goal lies in openness and ecosystem. Through co-creation with leading clients, Alibaba not only helps clients improve efficiency and value but also gains valuable feedback from them to continuously enhance its AI model's capabilities. This open collaborative ecosystem not only helps Alibaba achieve its long-term strategic goal of AGI but also allows downstream clients to enjoy the dividends of the AGI era in advance.

The ultimate battlefield of AI is not in the ivory tower but in the vibrant real world. Alibaba has chosen to be the pioneer that embraces the hustle and bustle, using 380 billion and countless industrial collaborations to drive the evolution and implementation of AI models. When AI truly enters various industries and creates visible benefits, Alibaba's investments have already yielded substantial returns.

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