Alibaba Eyes AI Subscriptions, Stablecoin Payments via JPMorgan

Key Points

Alibaba’s cross-border e-commerce division, Alibaba.com, unveiled a novel artificial intelligence subscription service this Friday, targeting an increase in the unit’s revenue. In an exclusive interview with CNBC, Kuo Zhang, president of Alibaba.com, shared that the division is actively considering the implementation of stablecoin-like technology to facilitate global payments. This signals a broader trend of major technology and banking sector players embracing “tokenization” – the digital representation of assets and currencies on a blockchain.

Specifically, Zhang indicated the potential for partnerships with banking institutions such as JPMorgan Chase to leverage their existing tokenization infrastructure. This comes as Alibaba increasingly positions itself as a frontrunner in China’s AI landscape, with its Qwen models being integrated across its diverse business portfolio, including Alibaba.com.

Alibaba.com, a critical component of the Alibaba Group that generated over $3 billion in revenue in the last fiscal year, empowers businesses to source suppliers and procure products from a global network. The platform’s newly launched “AI Mode” represents a significant augmentation of its search capabilities. This advanced feature allows users to conduct more granular searches, comparing suppliers based on a spectrum of criteria, including pricing, logistics efficiency, and production capabilities.

“We are witnessing a monumental shift towards AI-powered search engines,” Zhang stated, emphasizing the overarching objective of enhancing global trade and operational efficiency within the Alibaba ecosystem. “We recognize the urgency of utilizing AI to fundamentally reshape global trade practices,” Zhang further explained. “We believe this will mark a paradigm shift for B2B e-commerce.”

While Alibaba’s B2B segment demonstrates rapid growth, it remains smaller than its domestic e-commerce arm and cloud computing division. Currently, Alibaba.com generates revenue primarily from marketing and cross-border transaction-related services. However, the introduction of AI Mode is projected to unlock a new revenue stream through subscriptions, with pricing models under consideration, including a monthly rate of $20 or an annual subscription of $99, subject to finalization.

Founded in 1999 by Jack Ma and his co-founders, Alibaba initially focused on cross-border B2B transactions. The company has since evolved into one of China’s largest consumer e-commerce platforms and a cloud computing leader, boasting a diverse business portfolio encompassing food delivery and logistics. While the initial focus was connecting Chinese sellers to global buyers, Alibaba.com has strategically expanded its supplier base. The company reported a 50% surge in active suppliers worldwide between March and October compared to the same period last year.

“There are a multitude of high-quality products around the world with the potential to contribute to the global supply chain. We are making significant investments in this area,” Zhang noted, suggesting a diversification strategy beyond exclusively Chinese-centric sourcing.

Looking ahead, Zhang revealed that Alibaba.com is slated to launch a feature called “agentic pay” in December. This AI-driven capability will automate the creation of contracts between buyers and suppliers, a process traditionally conducted offline. The AI will analyze conversations between parties and automatically generate a corresponding contract, requiring confirmation from both sides. This promises to drastically reduce friction and streamline the contractual process on the platform.

Cross-border B2B transactions often involve multiple currencies, leading to costly and time-consuming payment settlements. To address this, Alibaba is exploring “tokenization,” representing money and assets on a blockchain to potentially circumvent traditional intermediary banks and speed up transactions. Tokenized deposits, backed by fiat currency, differ from stablecoins, which are pegged to fiat currencies but often issued by non-bank entities and backed by various assets.

Zhang confirmed that Alibaba.com is considering using tokenized versions of the Euro and the U.S. dollar. This approach could enable payments to bypass numerous intermediaries, facilitating faster global money transfers. “When U.S. or Euro buyers pay in Euros, the funds won’t need to navigate through numerous banks globally. Instead, utilizing tokenization and blockchain will enable simultaneous transfers to locations like Hong Kong or Singapore and back to China,” explained Zhang.

Zhang further specified that Alibaba.com intends to collaborate with JPMorgan, which has developed its own tokenization technology with the launch of JPM Coin (JPMD), designed for cross-border B2B payments. Addressing the potential integration of stablecoins, Zhang stated that Alibaba will conduct a thorough “evaluation” of their applications following the initial deployment of tokenized money transfers. This cautious and phased approach to blockchain-based financial technology highlights Alibaba’s commitment to regulatory compliance and risk management. The combination of AI-powered efficiencies and potentially streamlined payment systems could position Alibaba.com to be a leader in the next generation of global B2B e-commerce.