Joe Tsai Acknowledges Alibaba’s Past Mistakes: Engineers Worked Through Lunar New Year to Catch Up in AI After DeepSeek Breakthrough

In a candid assessment reflecting a pivotal moment for the tech giant, Alibaba executives are publicly acknowledging past strategic missteps as the company aggressively pivots towards artificial intelligence. The revelations come amidst significant internal shifts and underscore a renewed commitment to reclaiming its leadership mantle in China’s dynamic tech landscape.

At the VivaTech conference in Paris, veteran Alibaba leader Joe Tsai, made waves by candidly admitting to strategic errors made in the past. Acknowledging that the group “lost its way” and had “expanded too broadly,” Tsai’s statements signal a critical turning point for the company.

Tsai stated that Alibaba is now laser-focused on re-establishing its dominance in China’s tech sector, with AI and cloud infrastructure at the core of its revised strategy.

The company’s internal reckoning with AI was catalyzed by the emergence of DeepSeek’s R1 model, a development that sent shockwaves through Alibaba’s engineering ranks.

Tsai’s reaction to the DeepSeek breakthrough, as he recalled, was one of stunned introspection: “Goddamn, how could we be behind? We were working on this stuff before.”

This realization triggered a swift response within Alibaba. The company canceled the traditional Lunar New Year holiday, directing employees to remain in the office, working around the clock to accelerate development efforts.

Just weeks following this period of intense focus, Alibaba unveiled its own version of an advanced AI model: the Qwen series.

Since the launch of Qwen, Alibaba has aggressively rolled out new AI models, adopting an unwavering focus on AI, with a particular emphasis on Artificial General Intelligence (AGI).

Today, according to Hugging Face rankings, Alibaba’s Qwen models are among the most popular open-source large language models globally, a testament to the company’s commitment and rapid progress.

Further solidifying its commitment, Alibaba has pledged to invest over 380 billion yuan over the next three years to bolster its AI infrastructure, including data centers.

Tsai explained that the company’s decision to open-source the Qwen series was driven by a desire to democratize AI applications, enabling wider access, with benefits accruing to Alibaba’s cloud computing division.