JOSEPH C. TSAI, co-founder and Executive Vice Chairman of Alibaba Group, sees AI tools as a powerful force in shaping and transforming the future of the entertainment sector, according to his speech on Wednesday at the BEYOND Expo 2023 opening ceremony.

Please find below the transcript of the opening day speech from JOSEPH C. TSAI, Co-founder and Executive Vice Chairman of Alibaba Group. The following transcript has been edited for clarity:

Honored guests, I am very privileged and honored to stand here in front of you to talk about the future — the topic of “What’s Next?” When Jason asked me to make this presentation, I thought about several factors that are affecting not just the world but also Macao itself.

So, the first thing about Macao that I learned over the last several months is that Chief Executive Iat Seng Ho is very intent on transforming the economy away from just a single industry of gaming into the world of entertainment, content, healthcare, sustainability, and consumption. And I think that’s a very, very interesting factor, which will explain why I’m going to talk about what I talk about.

The second factor is what’s going on in the technology world — the launch of ChatGPT late last year. Everybody has been completely entranced by the whole idea of generative AI. AI used to be able to tell you the difference between dogs and cats, whether it’s black or white. But now AI can actually generate content just like a human brain, very actively generating new information, new content. So generative AI is going to be another important factor in what I’m going to talk about.

The third thing is, it’s important in my business. We’re in the online retail e-commerce business, and we’re very much part of the economy in China in terms of helping the whole Chinese economy to grow through consumption.

Consumption today in China is around 40% of the total GDP. Over time we hope to help the country grow the economy through consumption. But what we do today is online shopping — buying stuff, material things, buying material things.

What I’m going to talk about is something that’s a little bit more spiritual. Although it feels like not a real economy, it’s virtual, but I think having spiritual well-being is very important in terms of the whole consumption economy. So, my presentation with the confluence of these three factors — where Macao is going, where AI is going, and where consumption is going — I’m going to talk about digital entertainment.

So, we’re going to redefine digital entertainment. I will take you through an example of filmmaking. In making a film, there are a lot of problems. What are the problems? We have to decide who to pick. We have to decide actors and actresses. And actors and actresses are human beings. They’re very, very difficult to manage.

Believe me, I manage a basketball team and the players are very difficult to manage. If you’re in Hollywood, it’s very, very difficult to manage people.

The next thing is logistics. The logistics involve a lot of costs and moving around and then finally shooting post-production and things like that. Well, what happens if you make a film when it’s already done? You’ve done the shooting and then you want to change it. What happens? The change is a part of the pain point of the industry that is very difficult to solve.

So, these are the pain points. Let’s see what technology and the future can bring to solve these three problems.

Leah is a digital actress. She is a digital personality that we’ve created. She’s not a real person, and here’s the beauty of this. With digitization, we can bring together what is a very American sport, like baseball with something from China, that’s made in the image of a Chinese actress. And then we can merge the two together into a very sort of Chinese-American scene of promoting Major League Baseball. In fact, our group had done a deal with MLB to help promote this thing, and we have created a 3D model. When we create, we create a 3D model and it took us about a month to create. But today, if you use generative AI, it’ll take about a week to create this model.

So, today, in order to create this digital model, it’ll just take one week. That’s a very interesting aspect because now you replace human beings, you don’t have to manage the emotion for the issues with real humans. And the other thing is Leah is now a digital asset of the company — of the movie production company — and she belongs to the movie production company, and she’s in fact represented by an agent. The next thing is the NBA will probably call us and say, ‘Hey, can we use your Leah to help promote the league?’ I think that creates longevity for whoever created the character, and you can obviously build on the character.

The next thing is about logistics. This is what we call a digital studio. The traditional way of creating a studio and making an outdoor scene is you use the green screen, and the actor is standing on an empty stage with a green screen behind it, trying to act out something.

But now, with LED panels, we can create a studio with very little space. We have a studio in Beijing that’s about 2,000 square meters that can handle everything. The fact that you can create LED screens with scenes — we have hundreds of thousands of scenes that you pre create and put onto the screen. It makes shooting a film very easy. So you don’t have to really go on location. For example, here we have actors that are actually acting in front of the screen, so they are actually put into the environment of the story that they’re trying to tell. In this case, Mars and the spaceship. Once you’re in this environment, instead of standing in front of a green screen, you’re basically in the situation. You’re in the mood of the acting.

Now I want to talk about production a little bit. So, if you created a show, create something real and then you want to change things, there’s post-production tools to make it virtual. And what this does is it actually democratizes production and the whole post-production process because imagine if you are on TikTok, you can actually change things as you create your content.

And finally, generative AI. One of the last aspects of making a movie is marketing and promotion. So, what do you do when you market and promote a movie? You make posters. And now it’s very easy to generate these posters.

Within a few hours, you can use these generated AI tools to promote the posters. So, this is a movie (Born to Fly) that Alibaba Pictures invested in and it started showing during the Labor Day holiday. It’s a great movie, and we have basically generated these posters and put it all across the country at a very low cost. So that’s pretty much what I want to share with you about the future. And please go see this movie. It’s much, much better than Tom Cruise’s (Top Gun).