Alibaba’s AI development could be stop-and-go, as outgoing CEO highlights regulatory restraint in speech-Khongtu Review

AI regulation is as important as developing the technology, said Alibaba’s outgoing CEO Daniel Zhang, who will continue to lead its cloud operations

The comments align with Beijing’s goal of taming the tech’s erratic nature while keeping pace in the global AI race

Alibaba CEO Daniel Zhang, who also directly heads the company’s cloud business, speaking at the Nishan Dialogue on Digital Civilisation, organised by the World Internet Conference, in Qufu, Shandong province, on June 26, 2023. Photo: SCMP / Ben Jiang

Alibaba Group Holding’s development of artificial intelligence (AI) could be in for a bumpy ride, as the company’s outgoing chairman and CEO Daniel Zhang Yong said on Monday that the cloud business group will be hitting the accelerator and also pumping the brakes when appropriate, aligning with Beijing’s goal of trying to simultaneously tame and harness the technology.

Zhang, who is set to leave his roles at the e-commerce giant on September 10 to focus on leading Alibaba Cloud, told a government-backed forum that regulating AI is as important to the industry as developing the technology.

“Hitting the accelerator while also … hitting the brakes for security are equally important,” Zhang said at the Nishan Dialogue on Digital Civilisation in Qufu, a city in eastern Shandong province, the birthplace of the ancient Chinese philosopher Confucius. This strategy requires a “cooperative effort from the whole society to pre-empt any possible problems brought upon by the accelerated development of AI technologies”, he added.

The event was organised by the World Internet Conference (WIC), a government-backed annual forum started in China in 2014 to promote Beijing’s governance model for cyberspace. In 2021, the WIC expanded its membership to become an international organisation, although most of its funding still comes from the Chinese government.

China’s top cyberspace regulator, Zhuang Rongwen, said at the same event that AI in China must be “controllable and reliable”.

Alibaba Cloud is the leading business segment in developing and commercialising AI for the tech giant. It is the largest cloud computing business in China, but maintaining good business relationships with state-owned enterprises and government clients requires maintaining goodwill with Beijing.

The subsidiary is one of six new business groups under a corporate restructuring this year that will see each group run independently and able to seek outside funding. Alibaba Cloud is currently in the process of seeking an initial public offering, to be concluded in the next 12 months, according to the company.

Zhang said Alibaba, which owns the South China Morning Post, feels both encouraged by and “a very strong sense of pressure” from the global AI race, which has heated up since US start-up OpenAI launched ChatGPT last November. Beijing has been trying to keep pace while managing the risks of AI, putting out new regulations and funding development, while cracking down on overseas products.

Every player in this space has been looking to “make some achievement”, Zhang noted.

Alibaba is one of several Chinese Big Tech firms that has rushed to promote its own large language models (LLMs) – the big-data-fuelled algorithms that power AI chatbots – for enterprise use. Baidu was the first out the gate with its Ernie Bot, but Alibaba has since introduced its own model Tongyi Qianwen, and many other rivals have also joined the fray.

Baidu founder and CEO Robin Li also appeared at the Nishan conference, where he said the company’s Ernie foundation model was recently upgraded to version 3.5. It has double the training speed and can simultaneously handle 17 times more queries compared with the version launched in March, he said.

Baidu CEO Robin Li introduces the functions of Ernie Bot during an event in Beijing on March 16, 2023. Photo: AP

The internet search giant said the new model has significantly improved its output by better aligning with user expectations and in content safety that better adheres to local laws and regulations.

“It’s foreseeable that large [language] models will permeate into more and more sectors, becoming a key factor driving the digital economy and its integration with the real economy to further grow it,” Li said in his speech.

Zhou Hongyi, founder and chairman of cybersecurity firm Qihoo 360, echoed Li in his own speech at the event, saying vertical AI models catering to specific sectors will be the future. “Turning large [language] models into versatile tools in governmental or industrial areas will bring real value,” he said.

Alibaba’s Zhang said AI is set to transform industries old and new – from video gaming and finance to transport and telecommunications, among others.

While some issues such as AI ethics are still being sorted out, Zhang highlighted the enthusiasm the company has seen from clients in this space. More than 100,000 customers from a wide range of sectors have applied to use Tongyi Qianwen, according to Zhang.

“At the new starting line of the intelligent era, we can say that [AI] will rewrite the way a lot of sectors run,” he said.