Alibaba Group Holding Ltd. has announced a significant investment plan, committing over 380 billion yuan (approximately $53 billion) towards artificial intelligence infrastructure, including data centers, over the next three years. This major investment reflects the company’s ambition to transform from a traditional e-commerce giant into a prominent player in the AI sector. Co-founded by Jack Ma, Alibaba aims to enhance its AI and cloud computing capabilities, seeking to become a vital partner for businesses developing and implementing AI technologies. The company’s blog emphasizes the need for increased computing power as AI models evolve.
This strategic shift comes as Alibaba seeks to recover from the challenges posed by a government crackdown that began in 2020. CEO Eddie Wu recently stated that the company’s primary goal is now to achieve Artificial General Intelligence (AGI), placing it in direct competition with leading US firms like OpenAI, Microsoft, and Alphabet. Other tech giants, including Meta and Amazon, have also made substantial commitments to AI, investing billions in data centers to support AI services, indicating a strong belief in the technology’s future.
However, Wall Street analysts have raised concerns about whether demand will match the extensive investments in AI infrastructure, especially after the emergence of competitors like DeepSeek, which has developed cost-effective AI models. Following the announcement, Alibaba’s shares in Hong Kong saw a decline of up to 2.5%. Despite this, investors have responded positively to Alibaba’s renewed focus on AI, especially Wu’s mention of AGI, which marks a shift from the company’s core business.
In 2025, Alibaba has already gained over $100 billion in market value, although it has not yet returned to its pre-crackdown heights. Recently, Jack Ma participated in a summit with other prominent figures in Chinese technology, signaling Alibaba’s resurgence. The company has also invested in several promising Chinese startups and has improved its cloud services.
