Behind AI’s promotion of Ali’s growth, how many application trump cards are there?

Written by/Connected Insight Chen Feng 

On the evening of February 20, Alibaba announced its fourth-quarter 2024 financial report, signaling a comprehensive recovery in performance.

In the quarter, Ali achieved revenue of RMB 280.154 billion, a year-on-year increase of 8%, and net profit of RMB 46.434 billion, a year-on-year increase of 333%.

The most noteworthy thing is that Ali focuses on users first and its AI-driven strategy demonstrates its determination and strategic determination to fully embrace and resolutely invest.

At the earnings call, Alibaba Group CEO Wu Yongming mentioned that in the next three years, Alibaba’s investment in infrastructure will exceed its total in the past ten years.

Behind this, from the AI infrastructure layer, to AI’s transformation of existing businesses, to potential AI native applications in the future, Ali is accelerating its deployment.

One of these perspectives is that in terms of AI application layout, key entrances to several key to B and to C businesses of Alibaba have also surfaced.

Judging from Wu Yongming’s speech at the earnings call, on the C-end, from Taobao to Quark to Tongyi Qianwen, the next are Ali’s key AI application entrances for C-end users.

Specific to the B-end, Ding ‘s important position in Ali ‘s AI to B strategy is also further strengthened.

It is not difficult to find that behind Ali’s financial report, AI’s potential energy has just been released, and several application trump cards have also burst into greater vitality under the promotion of AI.

1. AI+ cloud becomes the new engine

Discovering Alibaba’s fourth-quarter financial report, the comprehensive acceleration of its two core businesses, e-commerce and cloud computing, is the core reason for the overall recovery of the group’s overall performance.

Let’s first look at Taotian Group.

In the fourth quarter of 2024, Taotian Group’s revenue increased by 5% year-on-year to 136.091 billion yuan, and adjusted EBITA also returned to growth, increasing by 2% year-on-year to 61.083 billion yuan.

Behind this growth in revenue, the driving effect of AI is constantly being released.

“Full combat promotion is one of the most important AI-based traffic operation tools launched by Taotian Group in 2024. It helps merchants use AI tools to sort out user needs and conduct accurate traffic based on this, and the penetration rate is growing.”

Focusing on the Intelligent Cloud Group, AI’s driving effect on performance is more obvious.

In the fourth quarter, Alibaba Cloud Intelligent Group’s revenue returned to double-digit growth of 13%, achieving revenue of 31.742 billion yuan. Among them, revenue from AI-related products has achieved triple-digit growth for six consecutive quarters.

Ali mentioned in its financial report that Cloud Intelligence Group’s revenue growth is mainly driven by double-digit growth in public cloud business revenue, including the increase in the adoption of AI-related products.

As Wu Yongming said at the earnings call, whether it is an open source model or a closed source model, most models will ultimately be hosted on the cloud computing network. We all have very clear business models.& rdquo;

At the same time as the overall performance recovered, Alibaba’s share price also rose back.

After the financial report was released, Alibaba’s U.S. stocks surged sharply before the market and continued to maintain their gains after the opening, with the increase exceeding 14% at one time. In Hong Kong stocks, Alibaba’s Hong Kong stocks also surged more than 12% after the opening.

Year-to-date, from Apple’s choice of Alibaba as a partner to the AI imagination demonstrated in the fourth quarter earnings report, the market’s confidence in Alibaba has been further boosted.

In other words, the market has not only seen the driving effect of AI on Alibaba’s existing business, but also seen the driving potential of AI for future performance growth.

2. Nail is the only entrance to Ali’s AI+to B scene

From a long-term perspective, four major applications will become key entrances to the imagination AI brings to Ali.

“We see obvious opportunities in several aspects. The first is the transformation of AI technology at the entrance of daily consumption, such as Taobao. Other directions also include the AI to C field defined internally by Alibaba Group, which mainly refers to the two apps of Quarketong Yiqian Wen.& rdquo; Wu Yongming said so.

Wu Yongming mentioned that thanks to the application of AI technology in the consumer field related to shopping and shopping decisions, there is still a lot of room for improvement in Taobao’s user duration and user value. AI technology may bring Taobao in addition to shopping., greater user value.

In addition, Quark now supports AI search and is currently the application with the highest number of users in the AI search field in China. The application of the AI model has great room for improvement in user search, productivity creation, and efficiency improvement.

In the to B scenario, nails are the only key entrance for Ali AI to B now.

“Another very important to B asset of the group is nail. In our view, there will be many scenarios and opportunities on the enterprise side in the future to use AI to reshape collaboration and collaboration within the enterprise. Nail is our most important AI application for the to B field.& rdquo; Wu Yongming said so.

He believes that in the future, enterprise internal systems will no longer be isolated functional modules, but a dynamic network connected and called by multiple AI agents (AI Agents). I think there are quite a lot of software and SaaS software in it, and opportunities for software upgrades in all aspects of PaaS behind SaaS software.& rdquo;

Among them, Dinghao, as a super portal carrying 700 million users and 25 million corporate organizations, is being repositioned as an enterprise intelligence hub for natural language interaction.

From this perspective, the strategic value of Dinggong has transcended user growth itself and is instead reflected in its right to define the AI agent ecosystem.

During the earnings call, Wu Yongming mentioned for the first time what changes AI would bring to the to B application scenario.

First, natural language is accelerating the transformation of Ding’s interactive experience. Wu Yongming mentioned that in the future, especially those on nails, many operations in enterprise collaboration will rely more on natural language, such as chat interfaces like nails, and the CM software or ERP software behind it will take on more database functions.

Last year, Dingjian launched the AI Agent product AI Assistant, which can realize Agent workflow through natural language dialogue. For example, users can help me generate tasks from yesterday’s meeting minutes by inputting and assign them to relevant people. The system can automatically call modules such as schedule management, task allocation, and document analysis.

As of June 2024, the AI assistant market built in Nail has connected more than 500,000 enterprise-built agents, covering contract review, recruitment interviews, data kanban and other scenarios.

Second, the AI Agents growing on nails, after being deeply integrated with nails, can further promote enterprise digitalization from tool empowerment to intelligent decision-making. Just like the decisions we make in meetings within enterprises, in many cases, they can actually be processed on nails through natural language. This is a very good combination of a typical AI agent and a nail.& rdquo;

Third, the large amount of private data and customized processes accumulated by Dingjian over the past can further meet the deployment needs of enterprises for privatization-specific models and AI agents after being combined with the Alibaba Cloud Tongyi model.

Finally, to sum up, as Alibaba accelerates the deep application of AI in various applications of the group and uses AI technology to upgrade existing businesses, as the key entry point for Alibaba ‘s AI to B, more growth is exploding in this transformation. potential.

(The header picture of this article comes from Ali’s official website.)