Alibaba Group Holding announced that it will invest at least 380 billion yuan (US$52.4 billion) in its cloud computing and artificial intelligence (AI) infrastructure over the next three years. This marks China’s largest-ever computing project funded by a single private company, underscoring Alibaba's commitment to AI.
This planned investment surpasses Alibaba's total spending on AI infrastructure over the past decade and is comparable to half of the initial US$100 billion investment in the Stargate AI initiative promoted by the US.
In a conference call with analysts last week, CEO Eddie Wu Yongming said the company plans to 'aggressively invest' in AI and cloud computing infrastructure over the next three years.
Alibaba, which owns the South China Morning Post, has said the plans underscore its “focus on AI-driven growth and its role as a leading global cloud provider”.
Alibaba’s investment plan has grabbed national attention amid a national frenzy to apply AI following the popularity of DeepSeek’s models in recent months. The official Xinhua news agency first reported Alibaba’s investment plan.
Alibaba’s recent earnings report showed better-than-expected profit and revenue for the December quarter, boosting investor excitement.
Alibaba Cloud, one of the tech giant’s key growth pillars, saw revenue jump 13 per cent year on year to 31.7 billion yuan, driven by triple-digit AI-related product revenue for the sixth consecutive quarter. It was the unit’s fastest quarterly growth in three years.
Alibaba 'appears poised to capture the AI cloud opportunity' with its latest investment plan, Morgan Stanley analysts said in a research note on Monday. The analysts raised their price target for the stock, projecting that Alibaba Cloud revenue would double in the next three years, reaching 240 billion yuan in 2028.
Alibaba’s Hong Kong-listed shares dropped 2.5 per cent to HK$135.1, which remain around their highest level since late 2021. Its stock price gained 15 per cent. The AI capabilities of China’s largest e-commerce and cloud services firm have gained increasing global recognition in the past month. Its progress captured global attention this month when news broke that Apple had chosen Alibaba as one of its mainland China AI partners for its Apple Intelligence feature on iPhones.
The capabilities of Alibaba's Qwen models are gaining recognition among developers, who are increasingly using Alibaba's technology as a foundation for open-source models. Several of the top 10 models on the developer platform Hugging Face were trained and developed using Qwen.
Additionally, Alibaba has hinted at the upcoming release of a new reasoning AI model built on its Qwen 2.5-Max model, which is currently closed-source. The company has made favorable comparisons between this model and DeepSeek's offerings. This move is expected to provide developers with an alternative to the widely adopted open-source DeepSeek-R1 reasoning model, which has been embraced by cloud providers since its debut last month.