Alibaba co-founder Joe Tsai discusses the company's evolution from an e-commerce giant to a major player in AI, emphasizing their commitment to open-source models like Qwen as a path to technological sovereignty and increased human productivity.
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>> Wow.
What a big room. Bonjour.
Are you enjoying today? Yeah?
Okay, now you will have a great, great,
great session.
Joe Tsai
from Alibaba with Christophe Jakubyszyn
from Les Echos.
As you know, VivaTech is a worldwide platform
platform
and we are pleased to welcome more than
170 countries. And when you walk through
the alleys, you will see a a lot of
pavilion from countries and a lot of nationalities.
nationalities.
We hear a lot about our friends from the
US, from Europe, of course,
but too often
we tend to forget
the other other half of the world and
that's why our next guest is here.
He co-founded Alibaba.
Alibaba.
People do not know very well his name,
but they will remember
forever because he has helped
transforming Alibaba.
And Alibaba has created Quen.
And I'm sure that you don't know,
but Quen is the most widely used open
source model in the world.
The most widely open social
AI model. It's not ChatGPT, it's not
Claude, it is Qwen.
Qwen.
And Alibaba released its latest version
of Qwen a few months ago, and we are
pleased to welcome someone who has been
at the helm of the company since its inception.
inception.
And he was the man behind the
open-source of AI. So, please welcome
very warmly Christophe Jakubyszyn from
Le Wagon
and a big round of applause for Joe
Tsai, chairman and co-founder of Alibaba.
Alibaba. >> [music]
>> Joe,
welcome. Christophe,
>> Hello everyone. [music]
Thank you to be here. We are very, very
pleased to as Maurice said to to welcome
Joe Tsai, the co-founder and the
chairman of Alibaba.
Um Alibaba went through many revolution,
and of course we'll speak about the last
one about the open-source LLM model.
Uh but first, can we
talk about your history? Because um
many people in France still feel things
you are a marketplace, B2B, B2C. We know
AI Express here.
I know you are the largest marketplace
in the in China. So, could you tell us
more about your the evolution of your
company, of your group?
>> Yeah, thanks, Christophe. It's uh
Maurice, it's great to be here. Uh
Uh
so, Alibaba started in 1999 as a B2B
marketplace. And at the time, the
business idea was very simple. We put
these small Chinese manufacturers and
trading companies online to sell to the
whole world wholesale. So, that kind of
was on the cusp of of China entering the
WTO. So, the export business was about
to boom. And then we got into the
consumer B2C
business and launched a website called
Taobao and which today is the largest
e-consumer e-commerce business in China.
>> How many customer?
>> We serve 820 million Chinese consumers.
And by the way, this platform helps
European companies and brands to to sell
30 billion euros to Chinese consumers
every year. So, you would say that
Alibaba is quite important for European
companies doing business around the
world. But you
what we are are went big into AI and
cloud. And this is is actually it's
quite a long history. We've been
investing in cloud technology since 17
years ago. And that's because of necessity.
necessity.
We were seeing that we were managing so
much data from our e-commerce business
and transactions on a daily basis
that we if we continue to be dependent
on other people's technology like
database and storage technology from
others, we would end up giving all of
our profits to the technology providers.
And hence there was an effort to develop
our own proprietary technology to manage
all the data. All right? And and that's
when our cloud business was born.
Basically, we ate our own dog food
before we launched the business to offer
that service to third-party customers.
But I think that that's
sort of from the micro perspective from
macro perspective, We're all in on AI.
Uh it's actually the logic is very
simple. Uh AI is today, if you ask me,
how big is the market, what is the
demand, what is the TAM, total
addressable market, uh I would tell you
that it's much, much bigger than any
anybody's IT budgets. It's much, much
bigger than the software market because
what is AI? AI is producing units of
human intelligence and human
productivity. And if you look at global
GDP over a hundred trillion dollars of
GDP, uh at least half of that, 50
trillion, 50 trillion dollars is about
human productivity and human
intelligence. And that is the TAM of AI,
and that's why we're all in on AI.
>> So So you think AI will really um make
us have a higher productivity because we
we just had like 1 hour ago a round
table where we were questioning that. Uh
We people are investing a lot, but they
don't see the results yet.
>> They don't see the results yet. I think
a a lot of corporate CEOs will tell you
that their engineers are burning a lot
of tokens, costs goes up. Uh but I think
I would say we're at the cusp of uh real
productivity gains. Uh right now a lot
of people are experimenting. And there
are uh definitely like we see it in our
company, our own engineers. There are
super users that uh use the coding tool,
for example, and they are uh not just
doing their work that that's within
their domain, but they're also
experimenting with other stuff because
when you give engineers toys, they will
always play uh
uh
with it more than and and they didn't
realize uh that the company's actually
paying for it, right? So this is what's
happening right now, but I think what
what I truly believe, this is really a
belief of whether, you know, uh
production of artificial units of
intelligence will be able to add value
to human intelligence and um
um
it's like religion. I don't I don't want
to convince all of you that that's going
to happen, but we believe that that's
going to happen.
>> So if we go back to the Alibaba
evolution in which layer of AI do you do
you invest most? Is it infrastructure
models, cloud services?
>> So we are in at least four layers of AI.
At the
at the the bottom we're not involved in
energy because in the China context
energy is actually very efficient, less
expensive, and the Chinese government
has invested over the last 15 years in
the national grid that makes energy
delivery production and delivery very
very efficient to all the users.
But we are at the from the bottom we're
involved in chips,
infrastructure in terms of our cloud
business, and also the model. We we have
as Maurice very uh
you know
you know kindly pointed out that we our
Quen model is actually one of the most
popular open source models in the world.
And then at the application layer we
have an e-commerce ecosystem. We have an
ecosystem for online shopping,
grocery delivery, travel
travel
maps and all of that that can where we
can infuse and deploy AI for our users.
So we're involved in all those stacks
of technology and
we we think that there's huge benefits
to the full stack
approach as opposed to just taking one
layer of the stack because
because
I think over time nobody can tell you
right now where the value will accrue.
Which part of the stack? Is it in chips?
Is it in cloud? Or is it in the model?
Right now the model companies and pure
model companies are very hot. They seem
to accrue uh a lot of the value,
uh but over time that may not be the case.
case.
Uh so, having a integrated approach of
being involved in the full stack uh
makes sense a lot of sense to us, and
that's our core strategy.
>> That's very interesting. You you right,
we don't really know where the value
will be, but uh when you see, you know,
the the investment in infrastructure for
AI, do do you think there is kind of
bubble there? Is it Do Do we have the
all those need to make the model work?
Because some model are more efficient
than others, and they they need less uh
capacity than others. So, what about that?
that?
>> I don't think so. Uh I mean, the numbers
really are quite astounding uh because
if you just look at the American
hyperscalers, the four or five companies
combined will invest over $800 billion
of CapEx, and next year it's going to go
to over a trillion dollars. It it's it's
eye-popping type of CapEx investment,
and and I think it's natural that people
will ask whether there's going to be overcapacity.
