Ant Group, the Fintech arm of Chinese tech major Alibaba, ramped up its research and development expenditures to a record 21.2 billion yuan ($3.05 billion) last year, according to its latest sustainability report.
This move highlights the company’s increasing focus on technology innovations, including artificial intelligence, as it seeks to expand its global footprint.
The Jack Ma-founded company, which has intensified its R&D investment over the past three years, has made significant strides in AI.
Last year, the Chinese government approved its large language model, BaiLing, for public use. BaiLing has since been integrated into various applications on Ant’s Alipay platform, including a “smart healthcare manager” and “smart financial manager,” enhancing user interaction and service efficiency.
As domestic growth slows, Ant Group has been proactively extending its operations overseas. The company has established partnerships with over 30 e-wallet platforms and banking applications, facilitating cross-border payments across Southeast Asia and Europe.
This strategic shift not only diversifies Ant’s revenue streams but also mitigates the impact of the slowing Chinese economy on its business.
In addition to its international endeavors, Ant Group continues to dominate the digital payments sector in China. Together with its affiliate MYbank, it served more than 87 million small business clients by the end of 2023.
The company also reported that 4.27 million merchants are utilizing mini-programs on the Alipay platform, contributing to a 68 percent surge in annual transactions compared to the previous year.
Despite these advancements, Ant’s profitability faced challenges last year. The company’s estimated annual profit fell approximately 24 percent, primarily due to a 7.1 billion yuan fine related to the conclusion of China’s prolonged regulatory scrutiny of the tech sector.
This fine marked a significant moment for Ant, signaling potential stabilization in the regulatory environment that could foster more predictable business operations moving forward.
Further restructuring within the company saw Ant Digital Technologies, previously a part of Ant Group, become an independent entity.
According to reports from Sina Tech, this new unit now operates separately and serves around 13,000 enterprises, indicating a strategic realignment intended to optimize operations and focus on core technological capabilities.
As Ant Group navigates through regulatory landscapes and explores new markets, its heavy investment in R&D is poised to play a crucial role in sustaining innovation and competitive edge in the rapidly evolving fintech sector.