Alibaba shares hit four-year high on expanded AI investment plans
Alibaba Group Holding Ltd. shares climbed to their highest level in nearly four years after the company announced it will increase AI spending beyond its original $50 billion-plus target.
The move places Alibaba alongside global tech giants committing massive resources to secure breakthroughs in the fast-accelerating artificial intelligence race, News.Az reports, citing Bloomberg.
Chief Executive Officer Eddie Wu anticipates overall investment in artificial intelligence accelerating to some $4 trillion worldwide over the next five years — and Alibaba needs to keep up. The company will soon add to a plan laid out in February to spend more than 380 billion yuan ($53 billion) developing AI models and infrastructure over three years, he said. His cloud division, which already operates services from the US to Australia, intends to launch its first data centers in Brazil, France and the Netherlands in the coming year.
Wu made his projections while outlining plans to roll out Qwen models and “full-stack” AI technology, reflecting Alibaba’s growing ambitions to both develop services and the infrastructure — such as chips — that underpin the technology. Its shares rose as much as 7.8% in Hong Kong, helping lift Chinese chipmakers ACM Research (Shanghai) Inc. as much as 15% and NAURA Technology Group Co. 10%.
The bullish reaction underscores global exuberance for all things AI, with investors betting massive capital spending will ultimately prove profitable. While skeptics have warned of a bubble in the making, for now markets are viewing such outlays as a sign of growing corporate confidence in the technology.
“The industry’s development speed far exceeded what we expected, and the industry’s demand for AI infrastructure also far exceeded our anticipation,” Wu told a developer conference in Hangzhou on Wednesday. “We are actively proceeding with the 380 billion investment in AI infrastructure, and plan to add more.”
From Huawei Technologies Co. to Tencent Holdings Ltd., China’s biggest tech companies are pouring unprecedented sums of money into AI. They join a wave of spending by American counterparts from OpenAI to Meta Platforms Inc. seeking to build and popularize a technology with the potential to transform economies and tip the world’s geopolitical balance.
Total capital expenditure on AI infrastructure and services by Alibaba, Tencent, Baidu Inc. and JD.com Inc. could top $32 billion in 2025 alone, according to Bloomberg Intelligence. That’s a big jump from just under $13 billion in 2023.
All of China’s internet majors are developing AI models and services at a rapid clip, including Tencent’s Hunyuan and Baidu’s Ernie. On Wednesday, Alibaba unveiled its new Qwen3-Max large language model and a series of other improvements to its suite of AI offerings.
Refocusing the business around artificial intelligence has started bearing fruit for Wu and Alibaba.
In the most recent quarter, the Hangzhou-based company reported triple-digit growth in its AI-related products. Its cloud division also posted a better-than-expected 26% jump in sales, making it the group’s fastest-growing unit. The company’s stock had more than doubled this year.
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