Alibaba Group Holding Ltd. has committed to a monumental $53 billion investment in artificial intelligence (AI) infrastructure over the next three years, including substantial spending on data centers. This ambitious move underscores the e-commerce giant’s determination to establish itself as a leader in AI technology. The company, co-founded by Jack Ma, plans to allocate more capital to its AI and cloud computing operations than it has over the past decade. The company aims to play a key role in the development and real-world application of AI, focusing on the increasing computational demands of evolving AI models, according to an official blog post.
The move marks a pivotal shift for Alibaba, which has been adjusting its strategy following a government crackdown that began in 2020. The company is redirecting its focus toward e-commerce and AI, with its Chief Executive Officer Eddie Wu declaring last week that Artificial General Intelligence (AGI) is now its primary objective. AGI, the concept of AI systems capable of matching or even surpassing human-level cognitive abilities, places Alibaba in competition with major players such as OpenAI, Microsoft, and Alphabet Inc.
Similar to other tech giants like Meta Platforms and Amazon, Alibaba is betting heavily on AI, with plans to build the data centers necessary for AI development, training, and hosting services. This signals a strong endorsement of the technology’s future. However, Wall Street has begun questioning whether the demand for such massive infrastructure investments will materialize, especially after the rise of DeepSeek, a Chinese startup that has developed a competitive AI model at a fraction of the cost of its rivals. In response, Alibaba’s shares in Hong Kong fell by as much as 2.5% on Monday.
Alibaba’s three-year AI investment timeline lags behind that of US counterparts like Microsoft, which plans to spend $80 billion on AI data centers in the current fiscal year, and Meta, which has set aside $65 billion for 2025. Alibaba’s relatively late entry into the AI space is partly to blame for this gap, although the company has long operated a global cloud platform similar to Amazon Web Services (AWS). Additionally, US sanctions limiting Chinese companies’ access to Nvidia Corp.’s advanced AI chips have constrained Alibaba’s computing capabilities, although this has also kept costs down.
Despite these challenges, investors have responded positively to Alibaba’s growing determination to lead in AI. Wu’s reference to AGI is particularly notable, given the company’s origins in online retail, marking a significant shift in its business direction.
On Thursday, Alibaba posted its fastest revenue growth in over a year, driven by its key divisions. Under the leadership of Joe Tsai and Eddie Wu—who took the helm in 2023—Alibaba has refocused its investments on e-commerce and AI, areas seen as critical to the company’s future success. Since the start of 2025, Alibaba’s market value has increased by over $100 billion, although it still remains below its peak before the government crackdown.
Alibaba’s resurgence was further underscored last week when Jack Ma joined other prominent Chinese business leaders at a summit hosted by President Xi Jinping, signaling the company’s return to favor. The event featured key figures from across various industries, particularly AI, marking a new era of support for China’s tech sector.
In addition to investing in its own AI initiatives, Alibaba has also been acquiring stakes in some of China’s most promising AI startups, such as Moonshot and Zhipu. The company has doubled down on expanding its cloud business to support AI development, even cutting prices to win back customers lost during the challenging years. Alibaba’s AI model, Qwen, has performed well in official benchmark tests, signaling the company’s growing relevance in the AI space. Moreover, Apple Inc. has integrated Alibaba’s AI technology into Chinese iPhones, providing a significant endorsement of its capabilities.
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