(March 26): Alibaba Group Holding Ltd and BMW AG will team up to produce AI for cars in China, as the tech giant looks to monetise its emerging products and the German automaker seeks to catch up to local brands that are dominating the key market.

BMW will adopt AI cockpit technology from Alibaba-backed Banma for its upcoming models tailored for the Chinese market, the companies said Wednesday in a joint statement. Banma’s technology is the product of collaboration with Alibaba’s own Qwen model team.

Software has become a key differentiator between electric vehicles, particularly in China, where local manufacturers like BYD Co have raced ahead of European carmakers. Volkswagen, Mercedes-Benz Group and BMW have had to seek out tech partnerships from Silicon Valley to China for the tech expertise needed for their next generation of cars to compete.

BMW, which relies on China as a major market, saw sales of its namesake brand and Mini fall 13.4% there last year and expects deliveries to remain muted this year.

To better compete, Alibaba will help BMW build a new intelligent personal assistant with enhanced voice recognition and trip planning features that will be rolled out next year in new models produced in China. The in-car AI agent can offer parking and nearby restaurant recommendations as well as real-time traffic light information.

Alibaba said its Qwen model has been used in cars produced by Chinese automakers Xpeng, Zeekr and Leapmotor.

Alibaba has been aggressively pivoting its focus to AI over the past few months, pledging to invest more than 380 billion yuan (US$52 billion or RM230.2 billion) on AI infrastructure such as data centers over the next three years. Chief executive officer Eddie Wu said in February that the pursuit of artificial general intelligence is now the company’s “primary objective.” The company also scored a coveted role providing AI technology to Apple Inc’s iPhones in China, which are due to be rolled out in the coming months.

Europe’s dependency on the US and China for the computing power needed to support AI is putting its auto industry at risk, Georges Massing, a Mercedes-Benz Group AG executive working on the company’s automated-driving push, said this week.

“We have in Europe neither a cloud nor a hardware that can train these models,” Massing said.

After years of grappling with its own software venture, Volkswagen AG is partnering with Rivian Automotive Inc and China’s Horizon Robotics Inc to develop the technology for its next line of EVs. Mercedes, meanwhile, is investing in Chinese AI startup Momenta to bolster its driver-assistance systems.

Uploaded by Magessan Varatharaja