The research institute will focus on developing artificial intelligence applications in a variety of areas including health care, smart homes and urban transportation.
Alibaba said that the institute, launched with Singapore's Nanyang Technological University (NTU), was the firm's first joint research center outside China. It will be housed on the university's campus.
Initially, the center would start with 50 researchers from Alibaba as well as the university. AI applications developed by the research institute would be tested on NTU's campus, within Singapore and across the Southeast Asian region, according to Alibaba.
The e-commerce giant and NTU together would invest millions of Singapore dollars per year over the next five years to fund research projects, according to a statement attributed to Alibaba Chief Technology Officer Jeff Zhang.
An Alibaba spokeswoman declined to break down the investment figures, but said the tech company's contributions would come from a research and development fund announced last year.
Zhang also said that Singapore was an important market for Alibaba's plans for Southeast Asia, and pointed to the city-state's well known research and development institutions, academic talent and supportive government policies as the basis for choosing to set up the center there.
Last October, Alibaba said it would invest $15 billion over a three-year period into a global research and development program, called DAMO Academy, to create new technologies.
On Wednesday, Alibaba said it was still looking to establish its own DAMO research lab in Singapore.
Artificial intelligence is still in its nascent stage but billions of dollars have already been spent on developing smart systems. International Data Corporation, last year, predicted that by 2021, global spending on cognitive and artificial intelligence systems could reach $57.6 billion.