Recently, the Ali Damo Academy officially confirmed the end of the quantum laboratory, and the specific response is to "donate the quantum laboratory and the quantum experimental equipment that can be handed over to Zhejiang University and open it to other universities and scientific research institutions". When searching, you can also find that the Quantum Lab homepage is empty.
In fact, this is just a microcosm of the "quick cut-through" of the Internet giants after the economic winter, the disappearance of dividends, and the slowdown of business. Below, we will analyze the main reasons for Alibaba's "painful cut" to cut the quantum lab from 5 perspectives.
01 Financial perspective - the field of quantum computing is too expensive
Alibaba's net profit in 2022 is 470RMB800 million, a year-on-year decrease of 67 compared with 20211%, and Alibaba once claimed to invest 100 billion in the field of quantum computing, more than 20% of the annual profit in 2022, which is obviously not a small amount.
It is not only a question of inputs, but also of uncertainties about outputs. The reality is that the cost of conducting research in the high-tech frontier field of quantum is huge, but it is not necessarily rewarding, and there is even a saying in the industry that "10 billion in the quantum field is 'listening'".
In the eyes of entrepreneurs, business is a production ratio, as long as you continue to invest a lot, at a certain time, there must be a big return. However, the uncertainty of production in the field of quantum computing may be beyond Alibaba's cognition. Ms. Dong of the air-conditioning factory once proposed to spend 500 billion yuan to make chips, which was once used as a joke in the industry.
Objectively speaking, it is already very good that Ali has been able to persist until now and invest so many resources, and it is also a decent choice to hand over the research results to the country and universities.
02 Organizational perspective - "1+6+N", clean up the business units that lack viability
On March 28, 2023, Alibaba announced the launch of the "1+6+N" organizational transformation: that is, under one Alibaba Group, six business groups and multiple business companies will be established, and the CEO responsibility system will be implemented under the leadership of the board of directors of each business group and business company.
This change makes each business unit more independent, with business performance as the guarantee and independent listing as the goal. We said a few months ago that Ali would further cut off the group's blood transfusion to various business units, and some business units that lacked viability were liquidatedSince it is mainly business-oriented and chasing independent listing, the existence of the sentiment of the quantum computing laboratory will inevitably drag down the business unit due to huge expenses and uncertain expectations. In the face of management, feelings will naturally be put down.
03 From the perspective of senior executives - Ali changed the coach, the "first fire" for the new official to take office
On September 10, 2023, Daniel Zhang resigned as chairman of Alibaba Group's board of directors, and Joe Tsai became the new chairman of the board. And Tsai Chongxin's tenure at the helm is Alibaba's internationalization.
According to Alibaba's financial report for the first quarter of fiscal year 2024, Alibaba International Digital Business Group (AIDC) is the fastest growing business line among the six major business groups, with a year-on-year growth of 41%, much higher than the 14% year-on-year growth rate of Alibaba 24Q. It is foreseeable that under the increasingly fierce competition of domestic e-commerce, going overseas has also become one of Ali's next priorities.
When Tsai Chongxin takes office, he will inevitably want to lead Alibaba to restore its former demeanor and make some achievements, so that investors can regain confidence in Alibaba. Therefore, it is also inevitable to shrink business lines and cut expensive projects, such as quantum computing, which burns money and does not necessarily produce results.
04 From the perspective of external competitors - the new Internet e-commerce is menacing
On November 28, 2023, Pinduoduo soared 18% overnight in the U.S. stock market with a market value of $30 billion with the strong performance of its third quarter results. The next day, the market value successfully surpassed Alibaba and became the new boss of China's e-commerce.
Alibaba's business layout is too wide to fully focus on the core, while Pinduoduo has refocused its resources on the e-commerce business, not only making great progress overseas, but also seizing a lot of market share in China. The strong rise of Pinduoduo has also led to a sharp decline in Alibaba's profits, a sense of crisis, and it has to reduce expenses, and it is logical that quantum computing is "cut".
05 Talent Perspective - Hangzhou's business atmosphere is greater than the academic atmosphere
Alibaba is headquartered in Hangzhou, an economically developed city with a much stronger business atmosphere than an academic atmosphere. Looking at the whole of Zhejiang Province, there is only one "985&211" university, and the academic atmosphere is naturally much lower than that of first-tier cities such as Beijing and Shanghai.
According to a report by Tsinghua University on the employment direction of graduates, the number of Tsinghua graduates who go to Alibaba for development is much lower than that of Huawei (a total of 32 of Huawei).6%), which also shows that there may still be a certain gap between Alibaba's recruitment of high-end talents and high-tech companies such as Huawei.
Figure 1: The employment direction of Tsinghua University's 2020 graduates.
Source**: Tsinghua University Student Career Development Center.
Since their own atmosphere is more suitable for management talents, it is better to let those high-tech talents return to scientific research institutions. Sometimes, the best love is to let go, isn't it?
The Internet giants have gone through countless rounds of fighting to get to where they are today, and Alibaba, as a veteran manufacturer, should have been "as stable as Mount Tai". But now, its investment in new business areas is quite tangled, and the e-commerce business as a base camp also has strong opponents, and new competitors such as Pinduoduo have sprung up, and the speed of update and iteration is staggering.
The principle of a business management is:In a fiercely competitive market, if you strategically ride the wall, you will inevitably be caught and punished by competitors. Whether Ali can resist the opponents who are "not good at coming" and sit firmly on the throne is a test of their strategic ability.
Where will Ali go in the future? How will the Tsai era begin? Time will tell.