Season 3, Episode 5: Alibaba

**Ben Gilbert** (0:00)
Yeah, that. Here we go.

**David Rosenthal** (0:03)
Google suggested search, what happened to Yahoo Steak and Alibaba?

**Ben Gilbert** (0:06)
Oh wait, I forgot about Altaba.

**David Rosenthal** (0:08)
Oh god.

**Ben Gilbert** (0:09)
The remaining company is Altaba, which is a holding company of everything that wasn't Yahoo. Altaba is worth 10 times more than what Verizon paid for Yahoo itself.

**David Rosenthal** (0:21)
Oh, they have a website, look at this. Company profile, independent. This is on their website. Altaba Inc. is an independent publicly traded, non-diversified, closed-end management investment company registered under the 1940 Act. Wow. What a mess.

**Ben Gilbert** (0:47)
Welcome to season three, episode five of Acquired, the show about technology, acquisitions and IPOs. I'm Ben Gilbert.

**David Rosenthal** (0:54)
I'm David Rosenthal.

**Ben Gilbert** (0:56)
And we are your hosts. Today, we are continuing our quest to more deeply understand China Tech with Alibaba.
So before we dive in a few fun facts about Alibaba, they had the largest US-based IPO of all time. Alibaba is China's biggest tech company. Alibaba's market cap even at their current scale doubled in the last year, and they were valued at over half a trillion dollars earlier this year. So you think about only a few companies are racing up to a trillion, and that's gotten all the news cycle. Alibaba, halfway there, growing very quickly. We may see a new trillion dollar company here in the next year or two. They're the number one retailer worldwide in front of Amazon or Walmart. Holy crap, I don't think I knew that before researching this episode. And yet, through all this, they're a bit of an enigma. Founder Jack Ma says that we are not an e-commerce company. We enable others to become e-commerce, but they themselves don't feel that it's fair to have a direct comparison between them and Amazon.

**David Rosenthal** (2:00)
And if only they were like somewhere you could go to get a really good story and understand the history and facts of how all of this came to be.

**Ben Gilbert** (2:09)
Yes, it's interesting for me, Alibaba, I think before we started doing the research was of the big Chinese tech companies, the one that I felt like I understood the least. I'm pumped to have sort of a little bit more of my hands around who the company is and how they came to be. So super excited to dive into that today.

**David Rosenthal** (2:25)
One of the hardest, as you say, big Chinese tech companies to understand and yet arguably the most important one. So here we go.

**Ben Gilbert** (2:35)
Here we go. Well, if you're new to the show, you can check out our Slack at Acquired.fm. It's the place where David, myself and over 1600 of our favorite listeners discuss episodes right after we released them, along with real time hot takes and the biggest tech news of the day.

**David Rosenthal** (2:51)
By the way, if you guys haven't clicked the link in the show notes from the Recode episode and watched Kara's interview with Stor Butterfield when Slack was tiny spec makers of Glitch and watched her video interview, it's amazing. Let's just say the world is better off that they pivoted into Slack.
Oh my.

**Ben Gilbert** (3:16)
Probably. This is a great time to tell you about one of our very favorite companies, Crusoe.

**David Rosenthal** (3:23)
So, Crusoe, as listeners know by now, is a clean compute cloud provider specifically built for AI workloads. NVIDIA is one of their major partners and literally Crusoe's data centers are nothing but racks and racks of A100s and H100s. And because Crusoe's cloud is purpose built for AI and run on wasted, stranded or clean energy, they can provide significantly better performance per dollar than traditional cloud providers.

**Ben Gilbert** (3:49)
Yes, we talked about that on our ACQ2 episode with Crusoe's CEO, Chase Lockmiller.

**David Rosenthal** (3:54)
The other element that makes Crusoe special is the environmental angle. Crusoe, of course, locates their data centers at stranded energy sites. So think oil flares, wind farms that can't use all the energy they generate, etc. And uses that power that would otherwise be wasted to run your AI workloads instead.

**Ben Gilbert** (4:12)
Yep. Obviously, it's a huge benefit for the environment and for customers on costs, since Crusoe doesn't rely on the energy grid. Energy is the second largest cost of running AI after, of course, the price you pay NVIDIA for the chips. And these lower energy costs get passed on to customers.

**David Rosenthal** (4:28)
It's super cool that they can put their data centers out there in these remote locations where quote unquote energy happens, as opposed to the other hyperscalers such as AWS and Google and Azure, who need to build their data centers close to major traffic hubs where the Internet happens because they are doing everything in their clouds.