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Alibaba is moving focus from the metaverse to artificial intelligence, resulting in numerous job cuts in its Yuanjing metaverse unit. However, the department is not being completely disbanded and will continue to offer metaverse services. This follows similar moves by other large tech companies, including Baidu and Meta, reflecting a broader industry trend towards AI. Despite this, though, Alibaba had recently invested $60 million in augmented-reality glasses maker Nreal as part of its goal to gain a share of the metaverse market.

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Looks like Alibaba is following in the footsteps of other major tech companies and backing off from the metaverse. With a lot of hype surrounding it, they’ve decided to shift their focus and resources toward artificial intelligence, which is currently considered the hot new thing among tech giants.

This decision has resulted in a bunch of job cuts in their metaverse department. The South China Morning Post reported that dozens of workers have been shown the door as Alibaba restructures to work more efficiently. This division, known as the Yuanjing metaverse unit, which operates out of Shanghai and Hangzhou, was set up by Alibaba in 2021 when the excitement around virtual world platforms was at its peak.

But don’t worry, despite the staffing cuts, the department will be sticking around, continuing to provide metaverse tools, apps and services. They received a hefty investment in the billions of yuan and at one point employed a couple hundred folks.

Just last month, Alibaba led a $60 million funding round for augmented-reality glasses maker Nreal. This was part of their dream of getting a slice of the metaverse pie. Other major Chinese tech companies, such as Tencent, ByteDance, and Baidu, were also eager to exploit the potential of the metaverse.

This move by Alibaba to downsize their metaverse department is not unique, as several other big tech companies have also shifted their attention from the metaverse to AI development. For example, in May 2023, the person in charge of metaverse operations at Baidu left the company after it decided to focus more on generative AI development. Around the same time, Facebook’s parent company Meta, laid off several employees from its Reality Labs unit, which was working on augmented and virtual reality tech for the metaverse.

All these changes reflect a broader industry trend. Seems like the metaverse isn’t quite living up to its hype, at least for now. Guess we’ll have to wait and see where the future of tech takes us!