Chinese auto maker SAIC Motor said yesterday it would join forces with e-commerce giant Alibaba to invest 1 billion yuan in a fund to develop Internet-connected cars. The pair will establish a joint venture, and aims to launch their first car in 2016, SAIC said in a statement. The 50-50 JV will be opened to other investors in the future, according to a spokeswoman for the automaker. SAIC shares rose 9.8 percent to a more than two-month high on news of the partnership, before shedding some of the gains to close up 4.8 percent. Chinese Internet companies and auto makers have been quick to team up to start developing partly self-driving and Internet-connected cars, following a path already trodden by U.S. tech giants Google and Apple. Internet giant Baidu, which leads China's search market and competes with Alibaba in some areas, is developing cars that are shifting parts of driving towards automation, working with companies like Germany's BMW AG. In an emailed statement, Alibaba said its partnership with SAIC would include developing new technologies and services using cloud computing.

Separately, Alibaba will also invest $200 million in Snapchat, the vanishing-image service, according to AFP. U.S. media reported last year that Snapchat - which facilitates the sending of text and photo messages that disappear seconds after being viewed - had held discussions with Alibaba, and a person familiar with the deal told AFP that Alibaba had committed to a $200 million investment; Alibaba, however, declined to comment. Bloomberg News, which also quoted sources about the investment negotiations, said the deal valued Snapchat at $15 billion. Snapchat Chief Executive Officer Evan Spiegel declined to comment, Bloomberg reported, but quoting him as saying: "We are famous for not talking about the future." Snapchat rocketed to popularity in the U.S., especially among teenagers, after the initial app was released in September 2011. Alibaba, founded by entrepreneur Jack Ma in 1999, is China's biggest e-commerce company, but is seeking to expand beyond its traditional business. It was listed on the New York Stock Exchange last year in the world's largest public offering to date.