($) Alibaba's AI Drama
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If you are a normal consumer of news, your timeline is likely flooded with minute-to-minute updates on the war in Iran, or the latest intrigues between Anthropic, OpenAI and the Department of War. For me, for better or worse, my timeline over the last 24 hours has been taken over by the potential mass exodus of the core members of Alibaba’s Qwen AI team, starting with its technical leader and arguably the face of the whole project: Junyang Lin.
I say “potential”, because the situation is still fluid. There is rumor that Junyang may return to Alibaba, after his very public resignation. There is now a leaked emergency all-hands meeting convened by Eddie Wu, the CEO of Alibaba Group (and the Alibaba Cloud division), as well as Alibaba Cloud CTO and the Group’s Chief People Office, to address this crisis moment. What does not help the matter is that Alibaba’s earnings release has been delayed, and yet to be announced as of this post’s publication, already spooking the investor class.
The situation is so confusing, with rumors and uncertainties floating everywhere that one X poster sardonically quipped: “Chinese AI labs finally catching up with the top US labs in the only metric that really matters - drama.”
Touché.
All the drama aside, I do think this episode deserves a serious analysis of its implications for Alibaba’s long-term AI strategy and business outcome. I have closely followed Alibaba, more specifically Alibaba Cloud, for the better part of six years. The 3rd post I ever wrote on Interconnected (March 1, 2020) was about Alibaba Cloud’s business, which back then was comparable to that of Google Cloud Platform (GCP). Much has changed geopolitically and technologically since then. GCP’s now growing like gangbusters thanks to AI – 48% year on year growth last year. Meanwhile, Alibaba Cloud is a shadow of its former self, but finding its footing more recently with Qwen’s growing popularity.
Not coincidentally, I think this latest personnel move and strategic change is Alibaba’s attempt to follow and replicate GCP’s success with Gemini.