Alibaba shutters quantum computing efforts

Alibaba shutters quantum computing efforts

In the same month that Alibaba shelved plans to spin off its cloud computing arm, the e-commerce and cloud computing company has now shuttered its quantum computing research laboratory.

Credit: IDG

Alibaba is shutting down its quantum computing research laboratory as part of the company’s ongoing restructuring efforts.

The closure of the lab will result in about 30 job losses but the equipment will be donated to Zhejiang University in Hangzhou, where the company is based, a company spokesperson reportedly told Bloomberg.

According to reports from Chinese media and cited by Bloomberg, Alibaba has had an active presence in the quantum computing market since 2015, with its now-shuttered Quantum Lab Academy offering an 11-qubit quantum cloud platform to help educate both employees and students about the technology. It’s believed that the company has invested around $15 billion in emerging technologies such as quantum computing.

In its simplest terms, quantum computers are machines that leverage the attributes of quantum physics to store data and perform computations. The technology can vastly outperform supercomputers, making it particularly advantageous for certain tasks and use cases, including cybersecurity, pharmaceutical development, financial modelling, climate change, artificial intelligence, solar capture, and electronic materials discovery.

Alibaba has not responded to a request for comment regarding the shutting of the lab.

Global uncertainties causing Alibaba to revisit restructuring plans

The news comes just under two weeks after Alibaba abandoned its plans to spin off and list its cloud computing unit, citing "uncertainties" related to the recent US controls on exporting chips to China. Had it gone ahead, the restructuring plan would have seen the business divided into six groups, with its cloud computing division being publicly listed by May 2024.

The overhaul is being spearheaded by Joseph Tsai and Eddie Wu, who were appointed as Alibaba’s chairman and CEO, respectively, in a leadership reshuffle that took place in June. Both men are veterans of the company and are reportedly close confidents of the company’s founder, Jack Ma.

As a result of the decision not to move ahead with that plan, the company saw a $20 billion decline in its market value, with shares falling by 10 per cent in Hong Kong. Alibaba has already laid off more than 30,000 employees across the entire organisation since 2022 due to spiralling costs, Chinese media outlets have reported.

Alibaba Cloud is one of the biggest public cloud service providers in the region and competes with the US-based Amazon Web Services, Google Cloud, and Microsoft Azure. The chip restrictions by the US are expected to help the US cloud providers gain an upper hand over their Chinese rivals.

Other than the Cloud Intelligence Group or the cloud computing unit, the other businesses included Taobao Tmall Commerce Group, Global Digital Commerce Group, Local Services Group, Cainiao Smart Logistics Group, and Digital Media and Entertainment Group.

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