Alibaba Group Holding Ltd. has announced plans to invest 380 billion yuan ($53 billion) in artificial intelligence (AI) and cloud computing infrastructure over the next three years.
The move signals the Chinese tech giant’s ambition to become a leader in AI development and cloud services, competing with major global technology firms.
The planned investment is Alibaba’s biggest-ever commitment to AI and cloud computing, surpassing its spending in these areas over the past decade. The company envisions itself as a key player in AI infrastructure, providing the computing power necessary for the development of advanced AI models.
“This also sets a record for the largest investment ever by Chinese private enterprises in the field of cloud and AI hardware infrastructure construction,” Citigroup analyst Alicia Yap noted.
The company’s Hong Kong-listed shares have risen more than 68% this year as investors react to its aggressive push into AI.
Alibaba’s CEO Eddie Wu recently declared that Artificial General Intelligence (AGI)—AI that can perform complex human-like reasoning—has become the company’s “first and foremost goal.” While US firms such as OpenAI, Google, Microsoft, and Meta are leading the global AI race, Alibaba is positioning itself as a serious competitor.
This investment aligns with a broader trend among major technology companies investing in AI infrastructure. Microsoft, for example, is expected to spend $80 billion this year on AI data centers, while Meta has allocated $65 billion for 2025. However, Alibaba and other Chinese firms face challenges due to US sanctions, which restrict access to high-end Nvidia AI chips, limiting their computing power but also reducing costs.
Alibaba’s renewed focus on AI comes as the Chinese government appears to be easing its regulatory stance on major tech firms. After years of scrutiny, co-founder Jack Ma recently attended a summit with President Xi Jinping, alongside other top Chinese business leaders—an indication that Beijing may be rebuilding trust with private enterprises.
Other Chinese companies, including ByteDance (TikTok’s parent company), are also increasing their AI investments. ByteDance reportedly earmarked over 150 billion yuan for capital expenditures in AI this year, according to Reuters.
Alibaba’s AI investment plans follow a strong earnings report for the quarter ending December 31, where the company reported 280.15 billion yuan ($38.6 billion) in revenue, an 8% year-over-year increase. Its stock price has surged this year, driven by renewed investor confidence and strategic AI-related deals.
However, some analysts question whether big tech firms are overestimating AI demand, particularly as cost-efficient AI models continue to emerge. DeepSeek, a Chinese AI startup, recently unveiled an advanced AI model developed at a fraction of the cost of its competitors, raising concerns about the massive investments being poured into the sector.
With input from Reuters, Bloomberg, and Business Insider.
