Alibaba Turns the Corner and Continues to Invest in AI Deep Learning Capabilities

How Alibaba’s investment in artificial intelligence revolutionized e-commerce in China. Alibaba, the world’s largest e-commerce company, is starting to see light at the end of the tunnel as consumer confidence slowly returns to investing in AI capabilities for deep learning following China’s crackdown on Covid-19. While it may take some time for the company to reach its full potential, it has already managed to beat expectations with a 2% increase in revenue to $35.92 billion during the fiscal third quarter ended Dec. 31.

According to CEO Daniel Zhang, sellers are eager to get back into business, and he expects the recovery to continue. However, it is not surprising that this has been a slow process, given that 2022 has been one of the sluggest years of China’s economic growth in decades. Chinese consumers also had to deal with a rising number of infections as lockdowns were lifted, resulting in lower demand in January and February as Covid continued to spread and New Year celebrations disrupted sales.

However, the situation has improved: the number of cases is decreasing, while consumer sentiment is rising, and online merchants are ready to cope with demand. These factors bode well for Alibaba’s continued recovery, especially given that it has 1.3 billion active customers a year, which gives the company a wealth of information that can be used to optimize virtual shopping.

Not surprisingly, Alibaba has announced that it will continue to invest in a large-scale AI deep learning model that can be trained on large datasets. Not only will this help strengthen its e-commerce division, but it could also be used to cross-grow its cloud business, which lags behind many of the world’s big competitors.

Despite Alibaba’s positive outlook, investors may still be wary of how this expansion will be managed given the company’s past regulatory scrutiny. However, continued investment in AI capabilities is a promising sign that the company is committed to staying ahead of the curve and continuing to provide top-notch e-commerce experiences to its customers.

We asked the Hargreaves Lansdown experts to comment on this issue:

“Alibaba is starting to turn the corner as consumer confidence is slowly returning from China’s onerous Covid zero crackdown, but it will take time before it fires all cylinders again. Revenues rose 2% during the quarter when restrictions were finally lifted. It is not surprising that this is happening slowly, given that 2022 has been one of the sluggest years of China’s economic growth in decades. Chinese consumers have also had to deal with a growing number of infections as restrictions were lifted. Demand was still subdued in January and February as the spread of Covid and New Year celebrations also disrupted sales. But now that cases have subsided, consumer sentiment has risen and the desire to spend is returning, which, combined with the willingness of online merchants to keep up with demand, bodes well for Alibaba’s continued recovery. Suzanne Streeter, head of money and markets department, “As the world’s largest e-commerce company, it has 1.3 billion active customers per year, which gives it a wealth of information that can be used to optimize the online shopping experience. Not surprisingly, the company announced that it continues to invest in a large-scale AI deep learning model that can be trained on large datasets. Not only will this help strengthen its e-commerce division, but it could also be used to cross-grow its cloud business, which lags behind many of the world’s big competitors. Investors may still be wary of how this expansion will be managed given that Alibaba has already come under scrutiny from regulators.”