China’s Top E-commerce Firm Alibaba to Open R&D Center in Israel

Company launches $15 billion drive for eight overseas centers

Jack Ma, Chairman of Alibaba Group, speaks during a conference in China, October 11, 2017.
Jack Ma, Chairman of Alibaba Group, speaks during a conference in China, October 11, 2017. CHINA STRINGER NETWORK/REUTERS

Israel is to host one of eight research and development centers as part of a $15 billion global drive by China’s top e-commerce firm, Alibaba, to build overseas research hubs to help it compete with global leaders in e-commerce, logistics and cloud technology.

The Alibaba Damo Academy will launch research bases in China, the United States, Russia and Singapore as well and is hiring 100 researchers to work on artificial intelligence, quantum computing and fintech, the company said in a statement on Wednesday.

“The Alibaba Damo Academy will be at the forefront of developing next-generation technology that will spur the growth of Alibaba and our partners,” Chief Technology Officer Jeff Zhang said.

The Chinese giant and its affiliates have undergone a rapid expansion in the past year, bringing it into direct competition with U.S. e-retailer Amazon, as well as global payments, cloud and logistics firms.

Since last year Alibaba has invested roughly $2 billion to acquire a majority stake in Singapore-based retailer Lazada.com, creating a network of e-commerce hubs across Southeast Asia in partnership with payment affiliate Ant Financial.

It has also pursued a $1.2 billion bid for U.S. money transfer service MoneyGram, in a pending deal that has come under scrutiny from critics who say it poses a national security threat.

Along with an existing data science research lab in California, Alibaba has opened new data centers in Europe, the United States, the Middle East, Australia, Japan, India and Indonesia since 2016, in a bid to boost its cloud business.

In Israel, Alibaba opened an investment office in 2014 and has put money into startups in augmented reality (Infinity AR, Lumus), communications (Visualead), search engines (Twiggle) and cybersecurity (ThetaRay). It also invested money in the Israeli tech fund Jerusalem Venture Partners.
The newest move by Alibaba marks a significant deepening of the Chinese presence in Israel; by some estimates 10% to 20% of all capital flowing into the high-tech industry comes from China. All of the local venture capital firms that have raised money recently, including Pitango, Carmel Ventures, Vintage and Canaan Partners, have tapped Chinese capital.

Alibaba’s investment plan also comes as Beijing prioritizes state funding in quantum computing, AI and big data, urging provincial governments, universities, the military and private firms to play a bigger role in developing advanced technology in areas where China trails developed countries.
Alibaba currently has 25,000 engineers on staff, it says, and says the new research infrastructure will help them meet a goal of two billion customers within two decades.