On a cold November night in Shanghai in 2020, the world’s largest IPO was abruptly halted by Chinese regulators.
It was Ant Group, the tech giant’s fintech affiliate. alibaba. The company’s founder, Jack Ma, one of China’s most famous billionaires, had come under intense scrutiny for comments that appeared to criticize the country’s financial regulator.
This was followed by four years of pressure on Marr’s empire.
Since the IPO was canceled, more than $400 billion has been wiped from Alibaba’s value, including recent gains. In the months following the failed listing, Mr. Ma retreated from the public eye, with Alibaba, China’s largest e-commerce company, looking down on him and management and organizational changes bearing little fruit. The move was not characteristic of the company’s past mettle and was a far cry from its current strong position.
But those who know Ma know that he should never be left out.
“The thing about Jack and his character was that he never gave up,” Brian Wong, a former Alibaba executive and author of “The Way of Alibaba,” told CNBC.
Wong will be appearing on my new show, “Built for Billions.” The show explores Alibaba’s most testing moments and delves into how it grew into one of the world’s largest technology companies and one of the most advanced artificial intelligence players.
understanding alibaba
I’ve been covering technology, mainly in China, for over 10 years. I lived in the world’s second largest economy for three years, from October 2018 to December 2021, when Alibaba was undergoing this major change. From its humble beginnings in 1999 as a business-to-business online marketplace in the early days of the Internet, the company’s reach cannot be overstated.
Today, Alibaba’s businesses span everything from food delivery to global e-commerce, cloud computing and artificial intelligence. Nowhere is the company’s brand and scale more evident than on Singles’ Day, an annual shopping event pioneered by Alibaba that features deep discounts and deals across the platform. What was once a one-day discount event has now become a multi-week event.
I attended Alibaba’s Singles Day in both Shanghai and Hangzhou headquarters. A grand celebration was held there, with celebrities and musical performances. The entire company is mobilized as billions of dollars are traded across the platform in a short period of time. These experiences gave me real insight into the size of the company.
Alibaba is sometimes compared to US technology giants. Amazon. But it’s not an apples-to-apples comparison.
“Alibaba is now seen as a serious player in the technology space, not just an e-commerce company,” Duncan Clark, an early advisor to Alibaba and chairman of consulting firm BDA China, told CNBC’s “Built for Billions.”
pressure and reinvention
After Ant Group’s IPO cancellation, Alibaba, and indeed China’s entire technology industry, faced liquidation. The Chinese government has tightened regulations and begun cracking down on domestic high-tech companies.
One common view was that China was concerned about the power wielded by domestic entrepreneurs.
Mr. Ma’s empire withstood increased regulation and nearly $3 billion in antitrust fines in 2021.
There was a level of soul searching going on at the company, which was battling a tougher domestic market due to a consumer downturn and increasing challenges from players like PDD and JD.com. How can Alibaba reinvigorate growth? And is Jack Ma finished for good?
When I left China in 2021, I was struck by how obsessed the international market was with Ma. It was as if his reappearance was a sign of Alibaba’s stance on the Chinese government. For example, if Mr. Ma is discovered anywhere, Alibaba’s stock will skyrocket.
This made it difficult to see what was happening in the background. Alibaba has undergone the largest reorganization in its history. However, that did not change the fate of the giants. Daniel Zhang, who succeeded Ma several years ago as CEO and eventually chairman, unexpectedly announced plans to step down in 2023. He was replaced by two respected military veterans, current CEO Eddie Wu and President Tsai Tsai.
They steadied the ship and refocused the company on its core e-commerce business, while also investing in AI. As a result, our business has improved significantly, particularly in recent quarters.
Is mom gone forever? That didn’t seem to be the case. In February, Ma was one of the few entrepreneurs to hold an unusual meeting with Chinese President Xi Jinping.
“He’s in his early 60s now and he’s still going strong. He’s got a house, a yacht and all that. But I feel like he’s not done yet,” Clark said.
Alibaba quietly becomes an AI giant
Amid the turmoil and recovery, Alibaba was quietly investing in artificial intelligence behind the scenes. In fact, it has been a priority since 2016.
“The acceleration really happened during the 2019-2021 pandemic period, when they really started building their own foundational models and their own chips,” Mark Greeven, professor of management innovation at the International Institute for Management Development, said on “Built for Billions.”
When OpenAI’s ChatGPT hits the world in late 2022, Alibaba is ready to offer its own AI service just a few months later.
Alibaba’s approach differed from its U.S. competitors by focusing on open source or open weight AI models that developers could download and use for free. The company’s model is currently one of the most popular worldwide used by developers.
CEO Wu has doubled down on Alibaba’s efforts to reinvent itself as an AI company. In his first letter to employees since taking office, Wu called on Alibaba to return to a startup mindset and set two strategic priorities: “users first” and “AI-driven.”
The focus on AI has benefited the company’s cloud business. It also comes at a time when AI development is being framed as a competition between American and Chinese companies, with Alibaba emerging as one of China’s leading companies.
“Everywhere you look, no matter what you touch, China is moving closer to its vision of dominating the AI race by 2030, and Alibaba is joining and becoming a key player,” Chinese digital expert and investor Ashley Dudalenok said on “Built for Billions.”
