Alibaba has laid off dozens of employees working in the Yuanjing Metaverse unit in both Shanghai and Hangzhou. It seems that the Asian e-commerce giant is following in the footsteps of the Big Tech companies and wants to allocate its resources to the AI sector.
Alibaba and the dismissal of dozens of employees from the Metaverso Yuanjing unit
According to what was reported, Alibaba has laid off dozens of employees from its Metaverse Yuanjing unit in both Shanghai and Hangzhou.
Founded in 2021, Alibaba’s Yuanjing Metaverse had grown over time, also receiving “billions of yuan” in investments.
In fact, 2021 was the year when there was excitement towards the metaverse sector. Some large Chinese companies, such as Alibaba, Tencent Holdings, ByteDance, Kuaishou Technology and the car manufacturer Li Auto, had rushed to register their metaverse-themed brands with the National Intellectual Property Administration, to explore the opportunities of a virtual world defined as the next iteration of the Internet.
Yet, as of today, the enthusiasm seems to have cooled down. Alibaba seems to have decided to join the other global Big Tech companies, which are cutting resources from the metaverse to allocate them to AI.
In any case, the source stated that Alibaba’s Yuanjing unit will continue to exist, focusing on applications and tools for the metaverse, as well as providing customers with metaverse-based services.
Alibaba and the Big Tech: the cuts to the metaverse to allocate resources to AI
Alibaba’s move to downsize its workforce in the metaverse reflects a shift affecting all the Big Tech companies worldwide.
In fact, it seems that even investments towards the metaverse are dwindling, as the new destination for resources is the Artificial Intelligence (AI) sector.
For example, the same Meta Platforms, whose name was chosen specifically to highlight the metaverse sector as its core business, has shown its interest in AI.
Last August, releasing its Q2 2024 report, it emerged an additional loss in the metaverse sector of 4.5 billion dollars. On the other hand, CEO Mark Zuckerberg showed his interest in AI by announcing his new model that will become the most used AI assistant by the end of the year.
The dominance of AI
Alibaba is joining other Big Tech to strengthen its presence not in the metaverse sector anymore but in AI. Besides Meta Platforms, there are also other giants that want to maintain their dominance in the sector.
Only in this month of October, it has emerged that Microsoft has invested 4.3 billion euros in Italy to strengthen digital infrastructure and the development of Artificial Intelligence, with the support of Premier Giorgia Meloni.
VanEck, the global asset manager, has raised 30 million dollars to launch its first Venture Capital fund to invest in fintech, crypto, and AI startups.
Nvidia, once famous for producing hardware for mining, is now immersed in AI. This month launched Nemotron, an advanced version of Llama-3.1, designed to surpass the most advanced AI models like GPT-4.
These days, then, even Apple seems to ride the AI trend, announcing the launch of the new 24-inch iMac. The new desktop has a M4 processor focused precisely on AI, challenging Nvidia in the production of microprocessors for Artificial Intelligence.