Please ensure Javascript is enabled for purposes of website accessibility

Alibaba Is Investing $1.4 Billion In AI For Smart Speakers

By Anders Bylund - May 20, 2020 at 9:21AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Chinese e-commerce titan is giving its R&D budget a significant boost, aiming to add artificial intelligence to the Tmall Genie product line.

Chinese e-commerce and cloud computing giant Alibaba Group (BABA 1.08%) is investing $1.4 billion in artificial intelligence development for Tmall Genie, the company's line of smart speakers. To put that figure into perspective, Alibaba spent $5.9 billion on R&D over the last four quarters. Adding $1.4 billion to a single project is a dramatic upgrade.

What can an AI-powered Tmall Genie do?

The AI push for Tmall Genie is not a long-term ambition but an immediate cash injection that falls in calendar year 2020. Alibaba will pursue this research both in the scope of established business ventures like the Alibaba Cloud platform and in research hubs like the DAMO Academy. The effort includes natural language processing, personalized user experiences, and advanced user interface development, all within the confines of edge computing in a consumer-oriented smart speaker or smart screen device.

In American terms, Tmall Genie can be compared to devices in the Amazon (AMZN 0.14%) Alexa ecosystem, such as the Echo Dot and Echo Show product lines. The Tmall name comes from Alibaba's popular online shopping website, revealing a tight relationship between the speakers and the shopping experience. Alibaba's devices have led the Chinese market for smart speakers since their original introduction in 2017.

A Chinese woman applies makeup with the help of a Tmall Genie Queen smart mirror.

The Tmall Genie Queen is a smart mirror with a speaker. Image source: Getty Images.

"By tapping into Alibaba's diverse ecosystem and cutting-edge technology, we are committed to bringing in more unique experiences to our Tmall Genie users," smart-speaker development general manager Ku Wei said in a prepared statement.

Adding AI functions to the smart devices will also simplify the process of connecting a screen or a speaker to other Alibaba services and hardware devices. The Alipay electronic wallet system is central to this effort, making it easier to engage in financial transactions across Alibaba's many platforms from a Tmall Genie speaker.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Anders Bylund owns shares of Alibaba Group Holding Ltd. and Amazon. The Motley Fool owns shares of and recommends Alibaba Group Holding Ltd. and Amazon and recommends the following options: short January 2022 $1940 calls on Amazon and long January 2022 $1920 calls on Amazon. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Alibaba Group Holding Limited Stock Quote
Alibaba Group Holding Limited
$90.74 (1.08%) $0.97, Inc. Stock Quote, Inc.
$142.30 (0.14%) $0.20

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/19/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.