Tsai on AI and Alibaba Strategy | Generated by AI

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Joseph Tsai, co-founder and Chairman of Alibaba Group, has been vocal in 2025 about AI’s role in business, the US-China tech dynamics, and Alibaba’s strategic focus on cloud computing and practical AI applications. His comments span interviews, summits, and partnerships, emphasizing adoption over raw model power, open-source innovation, and infrastructure challenges. Below is a summary of his key recent remarks, organized thematically with approximate dates.

AI Race and Global Competition (October 2025, All-In Summit Interview)

In a high-profile interview at the All-In 2025 Summit (September 8-10), Tsai pushed back against “winner-takes-all” narratives in the AI race, arguing it’s more like a “long marathon” focused on speed of implementation rather than the strongest models. He noted the narrowing gap between US and Chinese AI capabilities—from 9.3% US lead in January 2024 to just 1.7% by February 2025—and urged the US to prioritize applications over pure R&D: “The US should invest more resources in technology applications and popularization.”

Tsai highlighted China’s strengths in practical adoption, where AI use in companies jumped from 8% to nearly 50% in a year, driven by open-source models like Alibaba’s smaller-parameter ones (e.g., 1.7B and 8B parameters) suited for mobile devices. He described AI as a “ubiquitous fundamental element like air,” with huge potential for US-China cooperation in areas like healthcare and biology. On artificial general intelligence (AGI), he estimated it could take another 20 years, stressing the need for true generalization, and expressed confidence in China’s ability to manage superintelligence risks.

He also addressed US-China tensions, rejecting views of China as an “existential threat” and noting its peaceful focus on economic growth: “How many years has China not started a war? I feel it’s been 30-40 years.” Tsai praised China’s education emphasis (e.g., gaokao exams rivaling Ivy League aspirations) as a driver for AI progress.

AI Partnerships and Adoption in China (February 2025, World Governments Summit in Dubai)

Tsai revealed Alibaba’s growing role in powering AI for global tech giants in China. He announced a partnership with Apple to integrate Alibaba’s AI into iPhones sold there, including features like AI-powered search and Siri upgrades: “Apple has been very selective. They talked to a number of companies in China, and in the end they chose to do business with us… They want to use our AI to power their phones.” This deal underscores Alibaba’s edge in localized AI applications, contrasting with broader US restrictions.

In the same interview, Tsai outlined Alibaba’s “fit-for-purpose” AI strategy: building specialized applications for e-commerce, logistics, cloud, and more, rather than universal models. This approach avoids massive $100B+ investments like those by US peers (e.g., Google, Amazon), while embedding AI into Alibaba’s ecosystem for better user experiences.

He also shared a broader vision: “AI isn’t here to replace us—it’s here to support us,” enhancing human judgment in fields like research and law, and improving work quality without widespread job losses.

Alibaba Cloud and Open-Source AI (June 2025)

Tsai explained Alibaba’s decision to open-source its Qwen family of over 300 generative AI models, calling it a way to “democratize the usage of AI” and “proliferate applications.” This strategy drives demand for Alibaba Cloud by increasing needs for AI training and inference: “One reason Alibaba has opted to open-source its Qwen models is that it democratizes the usage of AI and proliferates applications, which in turn boosts our cloud business.”

He tied this to Alibaba’s post-restructuring investments, positioning cloud as a core pillar alongside e-commerce. By mid-2025, Alibaba Cloud’s revenue had reached 33.4 billion yuan (about $4.6B), with Qwen models powering tools like AI chat assistants.

NBA and Cloud Partnerships (October 2025)

Leveraging his ownership of the Brooklyn Nets, Tsai announced a multi-year AI and cloud deal between Alibaba Cloud and NBA China ahead of preseason games in Macau (the NBA’s return to China after six years). Alibaba Cloud becomes the official cloud and AI partner, developing an NBA-specific model based on Qwen for fan engagement and analytics. This builds on Alibaba’s sports tech, like 360-degree replay systems.

AI Infrastructure Bubble Warning (March 2025, HSBC Global Investment Summit)

Tsai cautioned about overhyping AI data centers, especially in the US: “I’m starting to see the beginning of some kind of bubble” in financing, with billions raised without secured demand. He noted speculative builds (“on spec”) and questioned the need for $500B+ investments: “People are investing ahead of the demand… but they are projecting much bigger demand.” Alibaba, he implied, focuses on efficient, demand-driven cloud scaling.

Alibaba’s Overall Strategy and AI Integration

Across 2025 comments, Tsai emphasized refocusing Alibaba on two pillars—e-commerce and cloud—with AI as the “glue.” Since returning as chairman 1.5 years ago, he’s streamlined messaging: “We only do two businesses: e-commerce and cloud computing, both containing AI elements.” At Alibaba, 30% of code is now AI-generated, boosting efficiency (e.g., drafting reports) and revenue through consumer apps like personalized shopping and delivery. No major layoffs have occurred, aligning with China’s “AI+” policy targeting 90% societal adoption by 2030.

Tsai’s tone is optimistic yet pragmatic, viewing AI as transformative but not zero-sum. Alibaba’s open-source push and partnerships (e.g., Apple, NBA) position it for growth amid US-China frictions, with cloud as the key enabler.

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