Alibaba's cloud floats above Chinese stock market chaos with AI boost

Profile picture for user slauchlan By Stuart Lauchlan August 24, 2015
Summary:
The Chinese stock market is in chaos, but Alibaba's cloud ambitions are undettered with the announcement of new AI capabilities to take on Amazon.

alibaba
When Alibaba announced a $1 billion push into cloud computing back in June,  CEO Daniel Zhang said that the spend was “just the beginning”.

So when Aliyun, the cloud computing arm of the e-commerce giant, announced yesterday that it’s breaking in to the artificial intelligence (AI) market, it perhaps shouldn’t have come as a surprise.

In the event, other matters in China yesterday rather overshadowed the announcement, but news of DT PAI as what’s being pitched as “China’s first AI platform” is another sign of how determined Alibaba is to try to counter Amazon on both the e-commerce and cloud platform fronts.

DT PAI runs on Alibaba's core algorithm structure and includes feature engineering, large-scale machine learning, as well as deep learning. Aliaba says its Open Data Processing Service (ODPS) is capable of handling 100 petabytes of data in six hours.

Tying it back into Alibaba’s core business of e-commerce marketplaces, the firm cites as a practical example of DT PAI’s capabilities the idea that online shoppers could take a picture of an item they like, upload the image, and then receive the e-commerce listing on where they can buy the product.

According to Xiao Wei, senior product expert, Aliyun:

Our goal is to create a one-stop AI development, publishing and sharing platform through data calculations and data connections, all with the aim of using AI to drive innovation in all aspects of life.

“In the past, the field of artificial intelligence was only open to a very small number of qualified developers and required the use of specialised tools. Such an approach was prone to error and redundancy. However, DT PAI allows developers with little or no experience in the field to construct a data application from scratch in a much shorter period of time. What used to take days can be completed within minutes.

Cloud business

Alibaba’s cloud computing commitment is looking increasingly serious, even if Aliyun is a comparatively new competitor to the likes of Amazon. The firm has already opened up a cloud data headquarters in Singapore as well as a data center in Silicon Valley. The company now has seven data centers in total, serving Aliyun’s 1.8 million customers.

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In its latest set of financial reports, Alibaba said it was “beginning to see the positive impact of years of investment”, with quarterly revenue from cloud-computing and Internet infrastructure up 106% year-over-year to $78 million.

CEO Zhang said at the time:

We are the number one market leader in cloud computing services in China, and we are beginning to reap the results of years of investment in this business.

The acceleration of our cloud computing business during June quarter was driven by an increase in the number of our paying customers as well as an increase in their usage of our cloud computing services, including more complex offerings, such as content delivery networks and data services.

In addition to having the most comprehensive service offering in China, our cloud business has a growing and a diversified customer base across public and private industries, including e-commerce, financial services, gaming and many others.

My take

They mean business.

Side note - Alibaba’s share price suffered like everyone else’s yesterday on the Chinese stock market chaos, dropping below its IPO level for the first time.

Accompanying on its slide was of course Yahoo!, whose financial fate is so closely tied to its stake in Alibaba. It’s going to be an even bumpier ride than expected for Marissa Mayer’s firm.