Key Takeaways:
Alibaba placed its AI model development under a single division led directly by Chief Executive Officer Eddie Wu.
Alibaba Group Holding created a new division called Token Foundry, consolidating its Tongyi Lab and Future Life Lab under CEO Eddie Wu, as the Chinese technology giant pushes to commercialize artificial intelligence.
"The new division puts CEO Eddie Wu at the centre of Alibaba's AI strategy as the company seeks fresh growth drivers," people familiar with the matter told the South China Morning Post.
Token Foundry brings together teams behind models including Happy Horse, a video-generation model, and Happy Oyster, an open-world AI model — both developed within Future Life Lab, previously housed under Taobao and Tmall Group. Zhang Di, who joined Alibaba in November 2025 after leading development of Kuaishou Technology's Kling video-generation model, will run Future Life Lab within the new structure, reporting to Zheng Bo, chief scientist and vice-president of technology at Taobao and Tmall Group. Zhou Jingren was named Alibaba chief scientist and will head a newly established AI Future Research Institute focused on next-generation breakthroughs.
The restructuring places Alibaba's AI efforts directly under the CEO, mirroring how competitors Baidu and Tencent have organized their own AI divisions. For investors, the question is whether centralized control can accelerate the path to monetization for Alibaba's AI models, which compete with Baidu's Ernie and Tencent's Hunyuan in China's rapidly evolving market.
A Unified AI Strategy Takes Shape
The creation of Token Foundry is the latest in a series of organizational changes at Alibaba as it pivots toward AI. Tongyi Lab, Alibaba's primary AI research unit, has developed the Tongyi Qianwen family of models, which power applications across the company's e-commerce, cloud computing, and entertainment businesses. By consolidating model development under a single division, Alibaba aims to reduce duplication and speed up the deployment of new capabilities.
The restructuring also gives Eddie Wu direct oversight of AI strategy, reflecting the technology's growing importance to Alibaba's future growth. Wu, who took over as CEO in 2023, has made AI a central pillar of his strategy, emphasizing the need to integrate AI across all of Alibaba's businesses.
Competition Heats Up Among China's AI Leaders
Alibaba faces mounting competition from Baidu, whose Ernie model has been integrated across its search and cloud businesses, and Tencent, which has deployed its Hunyuan model across its social media and gaming platforms. Both rivals have also restructured their AI operations in recent months, creating dedicated divisions to drive commercialization.
The appointment of Zhou Jingren as chief scientist and head of the AI Future Research Institute suggests Alibaba is also investing in longer-term research, beyond the immediate product development focus of Token Foundry. The dual structure — a product-focused division and a research institute — mirrors the approach taken by US technology companies such as Alphabet's Google DeepMind.
Alibaba's shares trade at roughly 10 times forward earnings, a discount to US peers but in line with other Chinese technology companies. The restructuring provides a clearer framework for investors to evaluate Alibaba's AI strategy. If Token Foundry can accelerate the deployment of AI features across Alibaba's e-commerce and cloud businesses, it could support revenue growth and margin expansion over the medium term.
This article is for informational purposes only and does not constitute investment advice.
