Alibaba shuts down quantum computing unit to focus on AI research

Getting your Trinity Audio player ready...

Chinese technology giant Alibaba (NASDAQ: BABA) has drawn the curtain on its quantum computing unit as part of a broader restructuring effort, weeks after abandoning the launch of a widely anticipated cloud business.

Reuters reported, the company’s decision to shut down its quantum computing unit will see it donate its lab and equipment to Zhejiang University as it sets its sights on new frontiers. The shuttering of the unit is expected to affect up to 30 individuals with Alibaba stating that a large majority of the affected employees may be absorbed by Zhejiang University.

Alibaba says the 30 roles represent only a small slice of its research and development team, confirming that it will throw its weight into other emerging technologies like generative artificial intelligence.

The company did not give exact reasons for shutting down its quantum computing arm, but pundits say that the move may be linked to the macroeconomic uncertainties triggered by the U.S. ban on semiconductor trade with China. The decision has spoiled China’s quantum computing plans as North America, Europe, and Southeast Asia ramp up investments in the sector.

Since 2015, Alibaba has played a prominent role in the quantum computing space via its Quantum Lab Academy, an in-house research initiative. The company has reportedly splurged nearly $15 million in emerging technology research, with a large portion of the funds deployed toward quantum computing.

The decision to shut down the unit is the latest in many internal restructuring events since the start of the year. In March, the company disclosed that it will split its businesses into six units operating independently, laying off over 30,000 employees in 2022.

Alibaba’s troubles were underscored after it announced the scrapping of the plans to roll out a new cloud business in mid-November. Following the announcement, the company’s shares tumbled by over 10%, compounding the woes for the technology giant inching forward after leadership reshuffling in June.

“The market does not like surprises,” said Thomas Hayes, Chairman of Great Hill Capital. “Investors had hoped to receive separate shares of the cloud business in hopes the segment could achieve a higher multiple in the public markets due to its growth potential.”

Generative AI is the way forward

Despite the pace of internal restructuring in Alibaba, generative AI has emerged as the biggest winner, accentuated by the commercial launch of AI products for the Chinese market.

In a strong statement of intent, the company rolled out an open-source AI model to rival Meta’s Llama 2 (NASDAQ: META) to critical acclaim. The company’s large language model (LLM) allows enterprises and AI researchers to train their AI models according to their requirements.

The release of Alibaba’s open-source model follows the launch of a legal framework by Chinese authorities for generative AI, joining a growing list of companies rolling out AI products for consumers.

In order for artificial intelligence (AI) to work right within the law and thrive in the face of growing challenges, it needs to integrate an enterprise blockchain system that ensures data input quality and ownership—allowing it to keep data safe while also guaranteeing the immutability of data. Check out CoinGeek’s coverage on this emerging tech to learn more why Enterprise blockchain will be the backbone of AI.

Watch: AI truly is not generative, it’s synthetic