(CTN News) – Alibaba, the Chinese technology giant, has recently announced the closure of its quantum computing unit as part of a wider restructuring effort.
This decision comes shortly after the company abandoned the launch of a highly anticipated cloud business.
According to Reuters, Alibaba will be donating its laboratory and equipment to Zhejiang University as it shifts its focus towards new horizons.
The closure of the quantum computing unit is expected to impact around 30 individuals. However, Alibaba has stated that a significant number of these employees may find opportunities at Zhejiang University.
Alibaba emphasizes that these 30 roles represent only a small portion of its research and development team. The company affirms its commitment to exploring other emerging technologies, such as generative artificial intelligence.
The precise reasons behind the closure of the company’s quantum computing division were not provided, but experts suggest that it may be connected to the uncertainties in the global economy caused by the U.S. ban on semiconductor trade with China. This move has disrupted China’s plans for quantum computing, as other regions such as North America, Europe, and Southeast Asia increase their investments in this sector.
Alibaba has been actively involved in the field of quantum computing through its Quantum Lab Academy,
An internal research initiative, since 2015. The company has reportedly invested around $15 million in research on emerging technologies, with a significant portion of these funds allocated to quantum computing.
The decision to shut down this division is part of a series of internal restructuring events that have taken place since the beginning of the year. In March, the company announced its intention to divide its businesses into six independent units, resulting in the layoff of more than 30,000 employees by 2022.
Alibaba faced further challenges when it revealed its decision to abandon the implementation of a fresh cloud business in mid-November. Subsequently, the company experienced a significant decline of more than 10% in its shares, exacerbating the difficulties for the technology behemoth as it slowly progressed following a reorganization of its leadership in June.
According to Thomas Hayes, Chairman of Great Hill Capital, “The market is not receptive to unexpected developments.” Investors had anticipated receiving distinct shares of the cloud business, hoping that this segment would attain a higher valuation in the public markets due to its growth potential.