Alibaba has announced it will be closing its quantum computing research lab in a move that marks further staff cutbacks for the Chinese technology giant. 

The announcement comes as the value of China’s quantum computing deals continues to fall behind the US.

The e-commerce and cloud company said the closure will result in around 30 people losing their jobs, according to a company spokesperson on Monday (27 November).

Alibaba will be donating all of its quantum computing equipment to Zhejiang University, where the division is based. 

The closure comes amid an overhaul of the company’s long-term business roadmap led by chairman Joseph Tsai and CEO Eddie Wu, both of whom were appointed in September. 

In March, Alibaba announced a reorganisation of the company that would split it into six separate companies. This included making its cloud division a public entity. 

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By GlobalData

However, the cloud division was scrapped in early November, after the company saw over $20bn wiped off its market capitalisation.

Alibaba cited US export restrictions on advanced chips as the reason for the U-turn. The company claimed the curbs had “created uncertainties for the prospects of Cloud Intelligence Group”.

Last week, Alibaba took steps towards revamping its cloud arm, in the hopes of competing with US-based Amazon Web Services, Microsoft Azure and Google Cloud Platform. 

The company said it would be putting more emphasis on the public cloud, meaning it will focus on targeting Chinese enterprises rather than government customers. 

Alibaba also said it also hopes to capitalise on artificial intelligence (AI) in the cloud, as AI applications require massive amounts of power that cloud computing can offer. 

“The cloud intelligence group will resolutely implement a strategy of driving growth with AI and of prioritizing public cloud. It will scale up its technology investments in AI-related software and hardware,” Wu said.

The value of quantum computing deals in China remain firmly behind the US, according to GlobalData’s deal database.

In 2023 so far, the value of quantum computing deals in the US totalled $18.2bn, while China totalled $128m.

Quantum computing deals in China peaked in 2021 valuing a total of $3.1bn, just beating the US which totalled just over $3bn.

Leading industry commentators estimated the quantum computing market's size in 2022 to be between $500m and $1bn, rising to $10bn between 2026 and 2030, GlobalData states in its Thematic Research: Quantum Computing (2023) report.

However, the research company states that forecasts are no more than an educated guesses "given its nascence and the prospect of unanticipated breakthroughs"

China is committing at least $15bn in quantum computing over the next five years, according to the report.

Our signals coverage is powered by GlobalData’s Thematic Engine, which tags millions of data items across six alternative datasets — patents, jobs, deals, company filings, social media mentions and news — to themes, sectors and companies. These signals enhance our predictive capabilities, helping us to identify the most disruptive threats across each of the sectors we cover and the companies best placed to succeed.