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Alibaba Doubling Down on $60 Billion Augmented Reality Market

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InfinityAR powers AR apps

Alibaba (BABA) recently bought Israeli augmented reality startup InfinityAR. The financial terms of the transactions were not disclosed, but there are many things Alibaba could achieve with InfinityAR.

InfinityAR was founded in 2013. Its foremost product is a platform that lets developers integrate AR capabilities into their apps. Its platform can be used to create AR-enabled apps for retail, gaming, and healthcare industries.

AR technology in advertising

AR technology has many applications including in the advertising space. Facebook (FB) and Snap (SNAP) are some of the digital advertising providers that have started offering brand options to run AR-powered commercials on their platforms. According to eMarketer estimates, global spending on AR-driven ads is poised to exceed $2.6 billion by 2022 from $428.3 million in 2018.

Alibaba is one of the top digital advertising providers in China, so it could leverage InfinityAR’s technology to help it capture more advertising expenditures.

Global AR economy to exceed $60 billion

The acquisition of InfinityAR marks an expansion of Alibaba’s involvement in the AR space. Alibaba is also one of the leading backers of Magic Leap, an American startup that builds AR headsets. Other Magic Leap investors include Google (GOOGL) and AT&T (T), which last year secured a deal to become the exclusive wireless distributor of the startup’s consumer products in the United States.

The global AR economy at large is forecast to grow to $60.6 billion by 2023 from $11.1 billion in 2018, according to ResearchAndMarkets.

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