What’s Behind Alibaba’s AI Funding Frenzy

Big tech companies the world over like to spread their bets on large language models. We’ve seen that with Microsoft—which backed OpenAI but has also struck deals with rivals Cohere and Mistral to make their models available to customers of Azure. (Microsoft also invested a tiny amount in Mistral). Similarly, Alibaba, China’s equivalent of Amazon, has invested in at least four Chinese generative AI startups that develop LLMs—in addition to building its own.

Why is Alibaba doing this? For one thing, China’s AI startup race doesn’t yet have obvious frontrunners like OpenAI and Anthropic in the U.S. Instead, because dozens of Chinese startups are touting their own LLMs, the industry is likely to go through a major shakeout. If Alibaba makes a multi-billion-dollar bet on just one Chinese startup, like Amazon has done with its investment in Anthropic, it might bet wrong.