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Alibaba restructures metaverse unit with $60M focus shift

Alibaba restructures metaverse unit with $60M focus shift

GrafaGrafa2024/11/05 14:00
By:Mahathir Bayena

Alibaba is restructuring its metaverse division, Yuanjing, resulting in layoffs in Shanghai and Hangzhou as the company narrows its focus on targeted metaverse applications and customer services, according to the South China Morning Post, which is owned by Alibaba.

The downsizing impacts “dozens” of employees in a unit that once employed hundreds and reportedly attracted “billions of yuan” in investments.

Despite this reduction, Yuanjing will continue operating with an emphasis on metaverse tools and services for end users.

This shift reflects a trend among tech firms adjusting their investments in the metaverse as they allocate more resources toward artificial intelligence (AI).

Meta Platforms, for example, previously restructured its Reality Labs division, while Baidu redirected its focus following the launch of AI tools like ChatGPT.

Alibaba has continued to invest in the metaverse, leading a $60 million funding round in Nreal, a Chinese augmented reality (AR) company.

Industry experts view AR, virtual reality (VR), and mixed reality as gateways for future metaverse engagement.

Yuanjing, in line with this, developed a cloud-based operating system to support metaverse applications in gaming and industrial sectors.

The restructuring follows broader tech trends prioritising AI, as seen with Baidu and Meta’s recent moves.

Yuanjing’s focus will now shift, although Alibaba is maintaining its presence in the metaverse with a leaner approach.

Global Markets Insights data suggests that the industrial metaverse market, valued at $22.4 billion in 2023, may grow at a compound annual growth rate of 29.5% from 2024 to 2032.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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