For any internet player, finding a bridge between the internet era and the AI era is no easy feat.

The same holds true for Alibaba.

When Daniel Zhang took the helm at Alibaba, the company's focus remained largely on traditional businesses. Zhang's transformation of Alibaba was limited to the existing internet-based operations and organizational restructuring.

Clearly, while these changes brought some improvements, they were far from addressing Alibaba's fundamental challenges and difficulties.

Ultimately, Alibaba needs a more fundamental and soul-touching transformation to truly overcome its predicaments and issues.

Although Zhang created Singles' Day for Alibaba, he may still lack the power to resolve Alibaba's deeper challenges.

Amidst this backdrop, Zhang stepped down, and Alibaba veterans like Joe Tsai and Simon Wu returned.

With the return of Joe Tsai and Simon Wu, a new phase of Alibaba's transformation began, distinct from Zhang's era.

Unlike Zhang's more conservative approach, Tsai and Wu's transformation was deeper, more fundamental, and more radical.

If we summarize Tsai and Wu's transformation, it aligns with Jack Ma's ongoing advocacy for AI-powered e-commerce on Alibaba's internal network.

In essence, Jack Ma now plays a spiritual role, while Tsai and Wu take on the hands-on transformation.

Thus, an AI-led transformation has begun at Alibaba.

Alibaba's connection with AI has surfaced.

I

Today, AI is present in virtually all of Alibaba's business lines, and its mention is frequent in Alibaba executives' speeches.

These signs demonstrate Alibaba's commitment to embracing AI.

Alibaba's comprehensive support for AI is undoubtedly on the right track.

Players like Baidu, with AI-powered comebacks, have proven their success.

Baidu has evolved from a follower in the mobile internet era to a leader in AI application.

This is evident in Baidu's repeated clashes with ChatGPT.

Ultimately, Baidu's early AI investment has led to its current achievements and comeback.

In a sense, Baidu has demonstrated through action that AI is the future.

If Baidu's early AI investment reaped new rewards, Tencent and JD.com's AI applications show the rising tide of AI.

Today, AI drives Tencent's growth and enables JD.com's new business model.

Alibaba's absence from AI equals missing out on the new round of competition among internet players.

To remain competitive, Alibaba must continuously embrace AI and explore its integration.

Alibaba's frequent mentions and reliance on AI reflect this trend.

In essence, only by enhancing Alibaba's voice in AI can it stay relevant in the new AI era.

Otherwise, Alibaba risks not only failing to reverse its mobile internet decline but also falling into new predicaments.

II

Alibaba's all-out embrace of AI and Jack Ma's repeated advocacy for AI show its urgency to transform.

Like Baidu's and JD.com's long journey to integrate AI into their operations, Alibaba will also need time to succeed in the new AI race.

Currently, Alibaba's AI embrace is still in its early stages.

Whether in its consumer-centric AI approach or platform logic, Alibaba's understanding of AI remains internet-focused.

While embracing AI can halt Alibaba's decline, a true turnaround and regaining mobile internet glory requires more than just an internet-style embrace; it needs a deep and comprehensive transformation.

Ultimately, Alibaba must move beyond the internet mindset and see AI as more than a marketing gimmick like new retail or e-commerce; it must deeply integrate AI into its operations, transforming its business model.

Alibaba must find AI's intersection with its supply chain and merchant partners.

AI must profoundly change Alibaba's operational logic and upstream production and services.

When Alibaba shifts its AI focus from consumers to businesses and platforms, it may find the chemical reaction it seeks.

Otherwise, Alibaba's AI embrace remains internet-bound and traditional.

III

A new competition in AI application is underway.

Zhou Hongyi predicted that this year marks the beginning of AI's practical applications.

Why wasn't last year the start?

One reason is that previous AI applications were more consumer-focused.

While this spread AI awareness, maximizing its potential requires B2B and supply chain upgrades, not just consumer targeting.

For players aiming to thrive in the AI era, focusing on B2B rather than consumers is key to capturing AI's new benefits.

Baidu's AI-powered transformations in transportation, education, and agriculture speak for themselves.

Apple's ChatGPT integration showcases AI's B2B potential.

Similarly, AI's integration with Tencent and JD.com has profoundly changed their core elements and operational logic.

This is how AI fully unleashes its potential, transcending internet-centric development logic.

As Alibaba integrates AI, especially with a deep AI connection, it must find ways to combine AI with its platform's vast industrial user base.

When AI becomes the catalyst for Alibaba's and its B2B users' transformations, Alibaba will have found the right AI embrace.

Other players' AI integrations reveal a clear roadmap: Platform players like Alibaba must use AI to transform their operations and empower B2B users beyond traffic, resonating with AI and fostering new growth.

Alibaba likely needs the same approach.

Moving beyond early consumer-focused AI to transform itself and upstream industries with AI is Alibaba's key to maximizing AI's potential.

Conclusion

AI is Alibaba's pivotal battle.

Whether through Jack Ma's advocacy or Joe Tsai and Simon Wu's hands-on transformation, Alibaba's deep AI connection is evident. AI seems its lifeline.

Alibaba's all-in approach is commendable.

However, Alibaba's AI focus must extend beyond consumers to its platform and upstream industries.

When Alibaba discovers how to dance with AI across its operations and upstream industries, taking its first AI step, the chemical reaction may unleash immense energy.

Then, Alibaba won't be absent from this new transformation but a contender, staying in the game with its former competitors.