Joseph Tsai responds to everything

Author | Liu Baodan

Editor | Zhou Zhiyu

More than two years after ChatGPT gained popularity, the discourse power of AI large models has shifted to China, with Alibaba, which has reinvested in AI, becoming the focus of capital attention.

Following Jack Ma's appearance in the Alibaba park, Alibaba co-founder and chairman Joseph Tsai also made a rare public appearance, conveying Alibaba's latest direction.

On February 13, at the World Governments Summit 2025 in Dubai, Joseph Tsai provided his judgment on the next steps for AI, predicting that more small models may emerge in the future, with many people beginning to invest resources in application areas.

He stated that with the explosive popularity of DeepSeek, people will start to change direction, no longer investing hundreds of billions of dollars in computing infrastructure, but focusing on real-world problems and using AI to solve them.

In Joseph Tsai's view, everyone should focus on applications and collaboratively develop AI using open-source communities and ecosystems. Whether large companies, small companies, or even entrepreneurs, they can deploy open-source code on their own infrastructure, whether it be data centers or laptops.

Recently, Alibaba was selected by Apple to develop AI features for the Chinese version of the iPhone. In response, Joseph Tsai stated that Apple needs a localized AI partner in China, and the discerning Apple has talked to many companies in China, ultimately choosing to collaborate with Alibaba.

He further emphasized, "We are very fortunate and honored to do business with a great company like Apple."

According to Wall Street News, Apple is working hard to introduce AI features in China before the middle of this year. By collaborating with Apple, Alibaba not only proves its model capabilities but also has very positive implications for acquiring more data, applications in the mobile market, and the entire ecosystem.

Since December last year, DeepSeek has sparked a revolution in computing cost through its V3 and R1 models and applications. After two years of catching up in the AI race, Chinese AI assets are undergoing a revaluation. On February 14, the Hong Kong Hang Seng Tech Index reached a high of 5450.73, marking a new high since February 2022, with an increase of over 20% since the beginning of the year.

Alibaba has become the core of the narrative for the revaluation of Chinese tech assets. Historically, due to the growth rate and profit performance of cloud computing, the impact of AI on Alibaba's valuation has been minimal, with Alibaba's valuation logic revolving around e-commerce. Now, this situation has been completely broken, and the capital market has begun to reassess Alibaba's AI.

On February 13, during trading, Alibaba's Hong Kong stock reached a high of HKD 124.3, a new high in three years. Since the beginning of the year, Alibaba's market value has surged by over HKD 600 billion, with the latest market value reaching HKD 2.2 trillion (approximately RMB 2 trillion).

The TMT group leader of the private equity firm Baiyi Hehehui Research Department stated to Wall Street News that currently, the valuation of cloud computing in Alibaba's stock price may be around 4 to 5 times PS, which is significantly lower compared to giants like Amazon AWS, indicating that Alibaba AI still has substantial revaluation potential.

However, how far Alibaba AI's valuation in the capital market can evolve ultimately depends on the performance of Alibaba Cloud's business. Currently, the demand for inference computing power has not yet exploded significantly, but in the long term, following the explosive popularity of DeepSeek, various industries are accelerating their embrace of AI, which will drive the usage of cloud services Regarding the current AI competition, Joseph Tsai believes that everyone is in a relatively intense competition, and the next released model may be better than some models, but not necessarily better than others, and then others will launch better things. "We think this is what is going to happen."

At the meeting, Joseph Tsai also emphasized Alibaba's consistent innovative gene and candidly admitted that the company has not been successful in mergers and acquisitions, but has achieved success through internal development, with Alibaba Cloud being a case in point.

When discussing why Alibaba has been successful, Joseph Tsai stated that many startups fail, products are constantly iterated, and if they fail, they shut down the company and do something else. However, Alibaba has never done this; out of a desire for survival, Alibaba has made many innovations.

From the B2B platform to Taobao, then to Alipay, including the creation of new business models, the profit engine of Taobao is actually based on a search advertising e-commerce market. "You can imagine that we did the same thing by inserting ads similar to Google into the eBay system. This is our invention, this is our idea," said Joseph Tsai.

Joseph Tsai emphasized that today, Taobao is still a very profitable platform, and our cloud computing business has also been achieved through organic development. "In fact, if you look at Alibaba's history, almost all of our high-growth businesses have been organically developed."

In 1999, Joseph Tsai first met Jack Ma and was completely captivated by him. As a leader, Jack Ma explained that internet technology could not only change companies but also change entire countries, and the followers he led fully believed in him, which ultimately led Joseph Tsai to decide to join Alibaba.

Joseph Tsai has worked at Alibaba for 26 years. 18 months ago, Alibaba underwent the largest structural adjustment in its history, and he took on the role of chairman of Alibaba. From acknowledging that Alibaba neglected user experience and shot itself in the foot, to assisting the younger generation of managers in steering Alibaba, he is trying to bring Alibaba back to its former peak.

From the e-commerce era to the AI era, if Joseph Tsai wants to lead Alibaba to create a new business miracle again, it will be an unprecedented gamble, destined to be fraught with difficulties