(Bloomberg) — Alibaba Group Holding Ltd. pledged to invest more than 380 billion yuan ($53 billion) on AI infrastructure such as data centers over the next three years, a major commitment that underscores the e-commerce pioneer’s ambitions of becoming a leader in artificial intelligence.
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The internet company co-founded by Jack Ma plans to spend more on its AI and cloud computing network than it has over the past decade. Alibaba envisions becoming a key partner to companies developing and applying AI to the real world as models evolve and need increasing amounts of computing power, the company said on its official blog.
That target marks one of China’s biggest AI infrastructure budgets, underscoring Alibaba’s growing ambitions in the field. But it comes at a time investors are pondering whether big tech firms are overestimating future demand for AI services, or the capital needed to create them.
TD Cowen analysts pointed out Friday that Microsoft Corp. is canceling leases for a substantial amount of data center capacity in the US — a move that may reflect concerns about whether it’s building more AI computing than it will need over the long term. Alibaba’s Hong Kong shares slid as much as 3% on Monday.
“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 wrote, adding that the amount surpassed her own estimates by about 30 billion yuan.
Big tech firms from Meta Platforms Inc. to Amazon.com Inc. are pledging billions toward the data centers needed to train, develop and host AI services.
Wall Street has begun to question whether such investment is running ahead of reality, particularly after Chinese upstart DeepSeek unveiled a model trained for a fraction of the cost of many of its rivals. But many of the industry’s biggest names — including Nvidia Corp.’s Jensen Huang — continue to argue that AI will simply transform the tech landscape.
Alibaba certainly falls in that camp. The Chinese company is now righting a business knocked off-kilter by a government clampdown that began in 2020, refocusing its ambitions on e-commerce and AI. Last week, Chief Executive Officer Eddie Wu declared that Artificial General Intelligence was now its primary objective, joining a race so far led by the likes of OpenAI and big US firms like Alphabet Inc.
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While a milestone for China, Alibaba’s three-year timeline lags behind its US peers.
Microsoft for one expects to spend $80 billion this fiscal year on AI data centers, while Meta has earmarked some $65 billion for 2025. That’s in part because Alibaba is a relatively newer entrant to the field, though it’s operated an AWS-like platform globally for years. Chinese firms in general are also limited by US sanctions from buying the most expensive Nvidia AI chips for their data centers — a factor that curtails computing power but also helps cap costs.
What Bloomberg Intelligence Says
Alibaba’s confirmed plans to invest at least 380 billion yuan ($53 billion) over the next three years is a speculative, risky gamble in the pursuit of AGI. Achieving AGI — the ability to mimic human levels of intelligence — would require a significant technological breakthrough. It’s not clear whether the current generation of models can achieve AGI, with any payback an uncertain and indistinct prospect.
– Robert Lea and Jasmine Lyu, analysts
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Still, investors have applauded Alibaba’s growing determination to compete in artificial intelligence. Wu’s reference to AGI — powerful, hypothetical AI systems that could emulate or match human thinking capabilities — is striking in the context of Alibaba’s traditional online retail business.
On Thursday, Alibaba posted its fastest pace of revenue growth in more than a year, underpinned by its two most important divisions. Joe Tsai and Wu — two of Ma’s most trusted lieutenants — took the helm of the company in 2023 and refocused investment on those spheres.
Alibaba has gained more than $100 billion of market value in 2025, though it’s still far from its pre-crackdown peak. Ma himself joined a select group of the biggest names in Chinese technology and business at a televised summit convened last week by Chinese President Xi Jinping — signifying Alibaba’s return to favor after years in the cold. The gathering featured entrepreneurs across a broad swath of industry, notably from the field of AI.
Since the advent of OpenAI’s chatbot, Alibaba has invested in a clutch of China’s most promising startups, including Moonshot and Zhipu. It prioritized the expansion of the cloud business that underpins AI development, slashing prices to win back the customers that fled during the turbulent years.
It unveiled a Qwen model that performed well in benchmark tests and signaled the company’s growing relevance in the field. Apple Inc. is incorporating Alibaba’s AI technology into Chinese iPhones, a vote of confidence in its prowess.
–With assistance from Mark Anderson and Vlad Savov.
(Updates with analysts’ comments from the fourth paragraph. An earlier version corrected the timing of Xi’s conference.)
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