(Yicai) May 20 -- Alibaba Group Holdings has dissolved the team behind Miaoya Camera due to the artificial intelligence-generated content tool, widely regarded as China's first viral AI consumer-facing application, failing to adapt to rapidly iterating technologies, according to an insider.

The Miaoya team, which is under Alibaba's entertainment and content arm Hujing Digital Media & Entertainment Group, has been constantly changing with frequent organizational restructuring over the past year, the insider told Yicai. Internal strategic adjustments and shifts in external competition have affected the tool's development, the person added.

According to several reports, Miaoya is operating on a low-cost basis, with no further product upgrades or promotions. Hujing Digital has not yet replied to Yicai's request for comment. 

Launched in July 2023, Miaoya allows users to upload multiple photos to create a digital avatar and generate portraits using built-in templates. The price of digital avatars used to be CNY9.90 (USD1.45), with the number of daily active users exceeding 600,000 to top the App Store in August that year.

"Miaoya had a first-mover advantage in its early days, but later it could no longer reap the dividends of model upgrades," the insider pointed out. "After tools from TikTok owner ByteDance increased in popularity, it no longer held any advantage."

Miaoya utilized Tiziano, an AI model developed by Hujing Digital. Although Damo Academy, Alibaba's research and development institute, had the Tongyi Qianwen AI model series, they were not applied to Miaoya.

Miaoya's tech edge was hard to sustain in the wave of rapid model iteration, with its creative concept quickly fading. In addition, ByteDance's Douyin, Meitu, and others launched related AI camera tools, with Douyin holding the advantages of traffic and social networking and continuously improving its image model capabilities.

Miaoya has already completed its historical mission, Zhang Shule, an internet industry analyst, said to Yicai. At a time when text-to-video content can be indistinguishable from reality, Alibaba and its video platform Youku need to scale back and provide a truly impressive platform for their AI, the analyst noted, adding that the app's simplistic functionality keeps users from delving deeper.

AI camera-related tools are rapidly growing in popularity, but have not truly matured, with computing power bottlenecks meaning that users merely try them out. The focus of Alibaba's AI is to serve e-commerce and achieve AI-powered shopping, while subordinate teams developing several hit AI agents serve as encouragement and trial-and-error.

Editor: Martin Kadiev