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10.16.17

Alibaba sets aside $15bn R&D war chest to be a world beater

How do you try and become one of the biggest and most influential technology companies in the world? Just move the $15 billion you have stashed away into the R&D business, suggests Telecoms.com (Paybefore‘s sister publication).

This might not be realistic for most companies, but apparently it is a goer for Alibaba. This is a company which has serious ambitions to emulate Huawei on the global stage.

By 2036, the company wants to serve two billion consumers, create 100 million jobs around the world and serve ten million companies through its various platforms and services. It certainly aims high.

But wishing big is never enough; there has to be some substance behind the dream. This is the part of the equation which most cash-shy telcos seem to be missing. Over the next three years, Alibaba will invest $15 billion into future applications of the technologies which we are finding out about today. Some might say it sounds similar to the Moonshot labs over at Google, and why not try to emulate one of world’s most successful businesses.

“The Alibaba DAMO Academy will be at the forefront of developing next-generation technology that will spur the growth of Alibaba and our partners,” said Alibaba’s CTO, Jeff Zhang, at the company’s Cloud Computing Conference.

“We aim to discover breakthrough technologies that will enable greater efficiency, network security and ecosystem synergy for end-users and businesses everywhere.”

Just in case you are wondering, DAMO is an acronym for Discovery, Adventure, Momentum and Outlook. The initiative will open seven labs in Beijing, Hangzhou, San Mateo, Bellevue, Moscow, Tel Aviv and Singapore, initially hiring an additional 100 researchers, though this will increase.

The initial focus areas will include data intelligence, the internet of things (IoT), fintech, quantum computing and human-machine interaction; the type of tech which people are hoping will turn business on its head.

Alibaba looks to be one of those companies who has the ambition to take on the technology world, but let’s hope a slowish start does not count against it. Cash injections in the R&D department are certainly a good sign, but perhaps reaching out to the international community is a much more positive one. Widening the international footprint is a necessity to ensure a business is capturing the best talent, and this is where Alibaba has been lacking to date.

When you look at all the Chinese firms who have successfully ventured (or hoping to) into the international arena, research has been geographically diverse. Huawei is all over the place, ZTE is getting more prominent as well. Tencent has announced plans to open up an AI research site in Seattle and Baidu has a research centre in Silicon Valley specialising in big data, deep learning and AI.

Alibaba is slow off the mark in this regard, but first off the line doesn’t always mean first to the finish.

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