Chinese e-commerce giant Alibaba commits to investing over $50 billion in artificial intelligence over the next three years. Despite concerns over excessive spending on AI, Alibaba believes in the technology’s potential to drive returns. The company is already seeing positive outcomes from AI integration in its e-commerce business.

Alibaba’s vice president Kaifu Zhang shared how the company has implemented various AI tools to enhance user experience, including personalized search results and improved virtual clothing try-ons. Preliminary testing has shown a 12% increase in returns on advertising spend, with Zhang predicting a significant impact on Alibaba’s gross merchandise volume during Singles Day.

Alibaba’s e-commerce unit in China continues to be the largest revenue source, with a 10% year-on-year growth in the quarter ending June 30, reaching $19.53 billion. Despite sluggish consumer spending in China, last year’s Singles Day saw a 20.1% year-on-year growth in sales for Alibaba’s Tmall, JD.com, and PDD.

During an earnings call, Alibaba emphasized AI and consumption as significant opportunities requiring substantial investments. CFO Toby Xu stated that the company’s priority is making these historic investments, even at the expense of profit margins, to capitalize on the potential of AI and consumer growth.

Read more at CNBC: Alibaba says AI spending for e-commerce Taobao Tmall is breaking even