The 2023 Alibaba Cloud Summit was held, and AI was deployed in the full stack. The 2023 Alibaba Cloud Summit will be held on April 11. The AI era places new demands on the quality and quantity of computing power, and Alibaba Cloud has formed a full-stack service that includes IaaS-Paas-MaaS. We believe that this conference has made further progress in computing power, models, open source, applications, etc.
In terms of computing power: the pursuit of greater inclusiveness. In the future, Alibaba Cloud will pursue more inclusive computing power, lower development thresholds, and improve large-scale operation efficiency. In terms of computing power supply, in August 2022, Alibaba Cloud launched the “Flying Computing Platform” and launched two large-scale intelligent computing centers, becoming the world's largest intelligent computing platform. Alibaba Cloud lays out AIGC for AIGC: 1) In terms of computing, it uses a high-performance dual-center architecture heterogeneous server, including PAI Ling Jun Intelligent Computing Service and Elastic Computing Service ECS. 2) In terms of storage, it includes high-performance storage CPFS and object storage OSS. 3) Network aspects, including RDMA high-performance networks and global interconnections.
According to this conference, the Lingjun Intelligent Computing Cluster provides AI with ultra-high performance computing power and can support the GPU scale of 100,000 cards.
PAI × Ling Jun's high-performance distributed model training platform can train 10 trillion parameter models and tens of thousands of cards to jointly train oversized models, providing a performance improvement of nearly 10 times. PAI × intelligent low latency model inference and service platform provides low latency services and improves inference efficiency. A number of new products were also launched at the conference, such as Flexible Computing U instances, up to 40% reduction in cost per unit of computing power, reserved space for object storage, price discounts of up to 70%, and Flying Sky's free trial.
Model base: “A Thousand Questions in Common Meaning” was released, and the Generic Model series continues to be rich. In September 2022, Ali released the latest “generic” big model series. Among them, the general model layer includes three types of models: general meaning - M6, general meaning - aliceMind, and general meaning - CV, covering multi-modality, natural language processing, computer vision. The professional model layer goes deep into e-commerce, medical, legal, financial, entertainment and other industries.
According to this conference, the large-scale language model (LLM) “A Thousand Questions in Common Meaning” was officially released, making it the fourth general model. Generalized questions support multiple rounds of interaction and complex instruction understanding, multi-modal integration, and external enhanced APIs. Applications include multiple rounds of conversation, copywriting, logical reasoning, multi-modal understanding, and multi-language support. Currently, “A Thousand Questions in the Common Meaning” is launching an official limited-time invitation experience.
Open source ecosystem: The “magic game” ModelScope has prospered and developed, with more than one million active users. In November 2022, Alibaba launched the AI Big Model Open Source Community “Magic Match” ModelScope, which aims to lower the application threshold of AI. According to this conference, since November of last year, the Magic Play community has had more than 1 million active users, and the number of models has been downloaded 16 million times. The number of models has increased from over 300 in November to over 800 now.
Application side: All of Ali's products will be connected to big models to promote the spread of AI. In the future, Alibaba Cloud will work to make AI more popular. As for Ali's internal situation, all of Ali's products will be fully upgraded by connecting to the general meaning of the thousand questions model. Currently, products such as DingTalk and Tmall Genie have been included in the General Questionnaire Test. For developers and enterprises, 1) It provides a variety of model access and transfer methods. Based on the Lingjun platform, it supports various models to deploy cloud services with one click, and supports flexible API calls and model fine-tuning and customization. 2) Launch a comprehensive set of enterprise-specific big model products, which can be developed through a web interface or an exclusive API.
Maintain a “buy” rating. We expect Ali's revenue for the 2023-2025 fiscal year to be 8667/9418/101.2 billion yuan; the net profit of non-GAAP to the mother will reach 1370/1527/167.5 billion yuan. Based on core e-commerce 10x 2024e P/E, cloud computing 5x 2024e P/S, entertainment 2x 2024e P/S, innovative business 2x 2024e P/S, and innovative business 2x 2024e P/S, the target price of Alibaba Hong Kong stock (9988.HK) of HK$140/US stock (BABA.N) of 143 US stock (BABA.N) was maintained to maintain the “buy” rating.
Risk warning: The impact of industry policies on business has exceeded expectations, progress in e-commerce and cloud computing has fallen short of expectations, and changes in the macro-environment have exceeded expectations.