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Alibaba Is Investing $1.4 Billion In AI For Smart Speakers

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

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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.

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