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Alibaba Group Holding is scales down its metaverse operations Alibaba Scales Back Metaverse Unit Yuanjing Amid Cooling Hype in the Sector
- Alibaba Group is reducing its commitment to metaverse-driven technology by scaling down its metaverse division, Yuanjing, within its operational setup.
- The downsizing is being carried out as part of the company's overall restructuring drive that is focused on improving operational efficiency and metaverse as a sector experiences waning hype.
- The move by Alibaba reflects a broader shift in focus toward artificial intelligence (AI), an area gaining traction as metaverse enthusiasm ebbs away.
- Yuanjing, which was established in 2021, has experienced layoffs, affecting teams based in Shanghai and Hangzhou, and the workforce reduction is part of an internal reorganization aimed at enhancing efficiency.
- Alibaba, along with other major Chinese tech players like Tencent, Baidu, and ByteDance, had raced to capitalize on the metaverse's potential in the past.
- Other tech giants have also scaled back their metaverse ambitions due to a cooled-out attraction; Meta Platforms, which is the parent company of Facebook trimmed down its Reality Labs division while Baidu restructured its metaverse unit.
- Despite the cutbacks, Alibaba does not plan to abandon Yuanjing entirely; the company intends to shift its focus from broad metaverse development to creating specific tools and applications for business and entertainment use.
- Alibaba's approach to Yuanjing suggests that while it remains interested in exploring metaverse metaverse applications, it is doing so in a more cautious way, focusing on tools and services with practical business applications.
- As technology trends evolve, Alibaba's dual approach allows it to capitalize on the benefits of each sector, AI and metaverse in a calculated and sustainable manner.
- While provincial governments pursue ambitious goals of nurturing metaverse industries worth billions of dollars, with Zhejiang province having introduced a metaverse roadmap targeting the creation of industries valued at 200 billion yuan by 2025, state media outlets have issued cautionary statements, warning against becoming overly entangled in the 'metaverse frenzy'.
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