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Alibaba’s cross-border e-commerce unit on Friday announced a new artificial intelligence subscription service aimed at boosting the unit’s revenue. Alibaba.com President Kuo Zhang told CNBC that the division is also considering using technology like stablecoins to facilitate global payments. The move highlights how big tech companies and the banking industry are adopting so-called “tokenization” technology. This could include partnering with banking partners like JPMorgan, Zhang added. Alibaba has emerged as one of China’s major AI players with its Qwen model used across its enterprises, including its business-to-business arm, Alibaba.com. Alibaba.com, which generated more than $3 billion in revenue for Alibaba in its last fiscal year, allows companies to source suppliers and products from around the world and buy goods. Alibaba.com on Friday launched “AI mode,” a more advanced version of search. AI mode allows users to conduct more detailed searches that allow users to compare suppliers on various metrics such as pricing, logistics, and production capacity. According to Zhang, there is a big shift towards the use of AI-powered search engines. The purpose of all this is to increase global trade and efficiency on Alibaba’s platform. “We feel an urgent need to leverage AI to redesign the way people conduct global trade,” Zhang told CNBC. “We think this will be a paradigm shift in e-commerce for B2B.”Although Alibaba’s B2B business is growing rapidly, it is still small compared to China’s domestic e-commerce and cloud computing sectors. Alibaba.com generates revenue from marketing and other cross-border related services. However, by using AI mode, the company hopes to open up new revenue streams through subscriptions. Zhang said Alibaba is considering pricing the service at $20 a month or $99 a year, but the price has not been finalized. When Alibaba was founded by Jack Ma and his co-founders in 1999, the company focused on cross-border B2B sales. Since then, the company has become one of China’s largest consumer e-commerce companies and a cloud computing giant. Its businesses range from food delivery to logistics. The original goal was to connect Chinese sellers with buyers around the world. However, Alibaba.com has expanded its supplier base. The company announced Friday that the number of active suppliers worldwide increased by 50% from March to October compared to the same period last year. “There are a lot of great products around the world that can also contribute to the global supply chain, and we are investing heavily in that part,” Zhang said. Tokenized Payments Zhang told CNBC. Alibaba.com also plans to launch a feature called “Agent Pay” in December. The company’s AI will be able to automatically create contracts between buyers and suppliers that were previously created offline and uploaded to Alibaba.com. Instead, AI can capture conversations that take place through messaging between two parties and turn them into contracts. Both parties then confirm that the contract is in place. B2B businesses are global and often involve multiple currencies, with buyers in one country paying suppliers in another country. Not only is this expensive, but it can also be time-consuming, as payments can take several days to complete and involve various intermediaries. To address this, Alibaba is turning to “tokenization,” a term that broadly refers to digital representations of money, Zhang said. Tokenized deposits are backed by fiat currency on the bank’s balance sheet. These are different from stablecoins, which are a type of digital currency that are pegged to fiat currencies like the US dollar, but are often issued by companies other than banks. Stablecoins are backed by various assets such as bonds and fiat currencies. Zhang said Alibaba.com is considering using tokenized versions of the euro and US dollar. This could potentially allow payments to be made without going through multiple intermediaries, potentially allowing funds to move around the world faster. “So when a U.S. buyer or a euro buyer pays a certain amount of euros, it doesn’t have to go through different banks around the world, but it actually uses tokenization and blockchain,” Zhang said, meaning the funds are sent “simultaneously” to Hong Kong or Singapore and back to China. Zhang told CNBC that Alibaba.com will work with JPMorgan, which has its own tokenization technology. JPMorgan launched JPMD this year, a token designed for cross-border B2B payments. On the topic of stablecoins, Zhang said that Alibaba will “evaluate” its potential use after using tokenized transfers.
