Alibaba Group Holding Ltd. has announced plans to invest over 380 billion yuan (approximately $53 billion) in AI infrastructure, including data centers, over the next three years. This significant commitment highlights the e-commerce giant’s ambition to establish itself as a leader in the field of artificial intelligence.
Co-founded by Jack Ma, Alibaba aims to allocate more resources to its AI and cloud computing ecosystem than it has in the past decade. The company envisions becoming a vital partner for businesses involved in developing and implementing AI solutions, recognizing the growing need for computing power as AI models advance, according to a statement on its official blog. This strategic shift comes as Alibaba seeks to recover from the impact of a government crack down that began in 2020, refocusing its goals on e-commerce and AI technologies. Last week, CEO Eddie Wu emphasized that Artificial General Intelligence (AGI) has become the company’s primary focus, entering a competitive arena dominated by firms like OpenAI and major U.S. companies such as Microsoft and Alphabet.
Similar to Alibaba, other leading tech firms, including Meta Platforms Inc. and Amazon.com Inc., have committed billions to building the data centers necessary for training, developing, and hosting AI services, reflecting a strong belief in the technology’s potential. However, Wall Street has started to express concerns about whether there will be sufficient demand to utilize all this capacity, especially after Chinese startup DeepSeek introduced a model trained at a fraction of the cost of its competitors. Following this news, Alibaba’s shares in Hong Kong saw a decline, falling as much as 2.5% on Monday. Alibaba’s investment timeline is slower compared to its U.S. counterparts; for example, Microsoft plans to spend $80 billion on AI data centers this fiscal year, while Meta has set aside around $65 billion for 2025. This slower pace can be attributed to Alibaba being a relatively newer player in the AI space, despite having operated a global platform similar to AWS for years. Additionally, Chinese companies face restrictions from U.S. sanctions that prevent them from acquiring high-end Nvidia Corp. AI chips for their data centers, limiting both their computing capabilities and overall costs.
Nonetheless, investors have responded positively to Alibaba’s commitment to compete in the AI arena. Wu’s mention of AGI—hypothetical AI systems capable of replicating or matching human cognitive abilities—marks a notable shift for Alibaba, traditionally known for its online retail business.
