The Alibaba Poverty Relief Fund will have the $1.51 billion donated over the next five years.
China has already lifted more than 500 million people out of poverty after three decades of economic reforms on the mainland and President Xi Jinping has made it a policy priority with a plan to eradicate extreme poverty by 2020.
Poverty in China is defined as having an annual income below 3,000 yuan (US$450) at current prices.
Deng Xiaoping reformed China to enable many in china to become rich. Deng had said those became rich first should then help those who were still poor.
Alibaba executives will be assigned to work on projects including education, poverty relief among women, developing sales of rural products from impoverished regions, and initiatives combining poverty alleviation and environment protection. All of them will have that poverty work included in their performance evaluations. Ma said all companies within the group would also be given a poverty relief project to handle.
Ma hopes that the fund could help rural Chinese to stay in their hometowns rather than having no choice but to leave their families behind and become migrant workers in the cities.