Chinese tech majors Alibaba (NYSE:BABA) and Tencent have poured nearly $300 million into Baichuan, an AI startup, according to Bloomberg. Founded by the creator of the search engine Sogou, Baichuan is already commanding a valuation of over $1 billion. Reportedly, China’s leading smartphone maker, Xiaomi, also participated in the funding round.
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The hefty valuation points to the buzz generated by new-age companies like Baichuan that are focused on artificial intelligence. Baichuan has introduced four open-source large language models and, impressively, was one of the first names to bag approval for a public rollout in China.
Companies around the globe are diving headfirst into AI. Today, Baidu (NASDAQ:BIDU) introduced Ernie 4.0, the latest iteration of its AI chatbot. The company is pitting Ernie 4.0 as a direct competitor to OpenAI’s ChatGPT 4 model.
So far, the Chinese tech sector has created more than 130 large language models, and this number could jump significantly as the country seeks to maintain its leadership in the tech space. Amid tightening tech curbs from the U.S., China aims to boost its computing power by over a third in the next three years, reaching over 300 exaflops by 2025.
Is BABA a Good Buy?
Overall, the Street has a Strong Buy consensus rating on Alibaba. The average BABA price target of $140.84 implies a mouth-watering 67% potential upside.
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