Alibaba announced on September 24th that it would increase its AI investment plan by more than $5.3 billion, sending its Hong Kong stock price soaring over 9% to a nearly four-year high. CEO Wu Yongming stated at the Hangzhou Developer Conference that global AI investment is expected to reach $4 trillion within five years, necessitating continued investment by the company. The announcement also coincided with the launch of the latest large-scale language model, the Qwen3-Max, and its in-house chip.
Stock prices hit a four-year high as the market is optimistic about the AI boom
Alibaba's Hong Kong share price rose by more than 9% in a single day, hitting a nearly four-year high since December 2021. It also drove Chinese chip maker ACM Research up 15% and North Huachuang Technology up 10%.
Investors believe that strong demand for AI and increasing returns are the key to companies' continued courage to invest huge amounts of capital.
Announced an additional investment of approximately US$5.3 billion, with further investment expected in the future
Wu Yongming stated at the Hangzhou Developers Conference that the AI industry is developing at a much faster pace than expected, and the demand for AI infrastructure is also beyond imagination. Therefore, Alibaba is actively promoting an investment plan of approximately US$5.3 billion and is expected to increase the investment further.
Alibaba Cloud will also establish its first data centers in Brazil, France, and the Netherlands within the next year, extending its global cloud footprint from the US to Australia. The Qwen3-Max large language model and upgraded services unveiled at the same event demonstrate Alibaba's continued expansion of its AI technology portfolio.
The recent quarterly financial report showed strong performance, benefiting from the growth of AI product revenue
According to Alibaba's latest financial report, revenue from AI-related products grew by more than triple digits, and cloud business revenue increased by 26% year-on-year, and is expected to become the fastest-growing business unit in the group.
Vey-Sern Ling, a senior analyst at Union Bancaire Privee, pointed out that companies will only increase their investments when return visibility improves. Alibaba's willingness to further expand its AI capital expenditures indicates that they are quite optimistic about market demand and return on investment.
Chinese tech giants are rushing into AI, with budgets exceeding $30 billion.
Alibaba isn't the only Chinese company investing in AI. Huawei has reportedly launched a three-year plan to challenge Nvidia, including the release of a new generation of AI chips and its "SuperPod" data center platform.
Large technology companies such as Tencent, Baidu, and JD.com are also continuing to increase their investment. The four companies' combined capital expenditure on AI infrastructure and services is expected to reach US$32 billion in 2025, far higher than the budget of less than US$13 billion in 2023.
Alibaba acquired Hangzhou Zhongtian Microsystems as early as 2018 and established the semiconductor division "T-Head". Its latest chip has been adopted by China Unicom, indicating that its independent research and development is gradually taking shape.
Faced with a US chip ban, China's businesses are forced to rely on independent research and development
The United States continues to impose export controls on high-end Chinese AI chips, including NVIDIA's RTX Pro 6000D, a GPU potentially used for AI training. The Chinese government has also urged domestic companies not to use these chips, forcing Chinese tech giants to accelerate their own research and development.
Alibaba is actively developing its own AI accelerators, as well as high-speed computing and networking equipment, with the goal of reducing its reliance on the US supply chain. Meanwhile, while Huawei impressed the market with its 7nm mobile phone chip launched in 2023, its ability to mass-produce higher-end process technologies remains to be seen.
(Ark bought Alibaba after a four-year hiatus and is optimistic about China's AI technology recovery)
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