Alibaba's $10 billion AI raise lands one day before Wan3.0 ships

Alibaba on Monday released its Wan3.0 AI video model. The tool turns documents, spreadsheets, slide decks, and web pages into 30-second clips, the company said in a post on WeChat.

The launch comes one day after Alibaba’s announcement of a $10 billion AI share sale.

Wan3.0 goes from beta to full rollout in three weeks

Alibaba Cloud said that Wan3.0 went into public beta on August 6. Since then, users have used it for short dramas, film production, advertising, tourism campaigns, and music videos.

A user simply has to feed the model existing material, a slide deck, or a spreadsheet and get a short video. This is for businesses that already produce documents and want them repackaged, not for hobbyists making clips from scratch.

ByteDance, the owner of TikTok, shipped Seedance 2.0 in February. The competing model produces video from text, images, or existing footage.

It wasn’t long before Disney issued a cease-and-desist order over the characters that appeared in user-made clips, as Cryptopolitan reported at the time.

Alibaba hauls in $10 billion as quarterly profit drops 76%

The day before Wan3.0 was shipped, Alibaba said it would place HK$80 billion, or about $10.2 billion, in new shares and put all of that into AI.

The raise would “extend the company’s global AI leadership,” Alibaba said. In its August 23 announcement, it says it’s investing in its full-stack AI push, including expansion of infrastructure.

Demand from sovereign wealth funds and long-only funds outstripped the size of the offering, a person familiar with the deal said.

That prompted Alibaba to raise the placement to HK$80 billion. This is the largest primary follow-on offering ever made by a Hong Kong-listed company.

Alibaba’s profit for the three months to June 30 fell 76% to 10.54 billion yuan, or about $1.55 billion. The company said on August 20 that revenue rose 9% to 268.95 billion yuan, ~$39.64 billion.

Capital expenditure increased 75% to 67.68 billion yuan, ~$9.98 billion, most of it related to AI infrastructure. Cloud revenue was up by 45%.

CEO Eddie Wu Yongming told investors the company expects its AI computing investments to break even within three years.

Margins could improve enough to reduce the payback period to around two years, he said on last week’s earnings call. Alibaba aims for $100 billion in combined annual cloud and AI revenue within five years.

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