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Broader AI application boosting biz growth

By FAN FEIFEI | China Daily | Updated: 2024-05-16 09:18

A girl stands in front of the Alibaba Group Holding Ltd headquarters in Hangzhou, Zhejiang province, in May 2021. [Photo/Agencies]

Fast-developing artificial intelligence technology has the potential to revolutionize various industries and provide strong support for sustainable business growth of major Chinese tech companies, industry experts said.

They added that enterprises can develop new business models, products and services that cater to rapidly changing market demand by leveraging generative AI technology, which is expected to speed up its integration with a wider range of fields and bolster transformation and upgrade of traditional industries.

Their comments came as Chinese tech heavyweight Alibaba Group Holding Ltd reported on Tuesday that revenue from its cloud computing business rose 3 percent year-on-year to 25.6 billion yuan ($3.5 billion) during the January-March period.

Its core public cloud products recorded double-digit growth in revenue, while AI-related revenue saw accelerated growth and continued to record triple-digit expansion year-on-year.

Wu Yongming, CEO of Alibaba Group, said in an earnings call with investors that this wave of generative AI-driven technological innovation is in the early stages of development and they have seen a rapid increase in customer demand for AI since the beginning of this year.

Alibaba is actively investing in its cloud computing products, especially in AI infrastructure, to capture monumental opportunities, and it will continue to focus on executing a user-first and AI-driven strategy, Wu said.

AI-related revenue was generated from various sectors including foundational model companies, internet firms as well as customers from industries such as financial services and automotive, Alibaba said.

"Going forward, a lot of the incremental growth we can expect to see in the cloud business will be related to investment that customers are making in AI," Wu added.

The company recently slashed prices for over 100 core public cloud products in the Chinese market. Over 90,000 enterprises have adopted Alibaba Cloud's AI-powered large language model Tongyi Qianwen since it debuted a year ago.

Tencent Holdings Ltd announced on Tuesday that its online advertising sales jumped 26 percent year-on-year to 26.5 billion yuan in the first quarter after it upgraded its advertising infrastructure and deployed AI to more precisely target advertisements on its instant messaging platform WeChat.

Jiang Han, a senior analyst at market consultancy Pangoal, said AI technology has made great contributions to the growth of Alibaba's cloud computing business.

"Alibaba Cloud can provide customers with more accurate and personalized services through the introduction of AI technology, which helps the company expand market share and drive business growth."

Jiang added that AI technology is playing a vital role in improving user experience by analyzing customer behaviors and interests and then offering tailor-made content and recommendations, so as to increase user engagement and retention rates.

The technology will also help companies optimize and adjust advertising strategies, and reduce the cost of advertising, thus improving their business performance, he said.

Global market research firm International Data Corp said the IT sector will feel the impact of AI more than any other industry, as every company races to introduce AI-enhanced products or services and to assist their customers with AI implementations. Moreover, Chinese companies respond faster to AI deployments compared to their foreign counterparts.

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