Alibaba Expands AI Investment Beyond $50B as Shares Hit 4-Year High

Alibaba Group’s stock climbed to its highest level in nearly four years after the company announced plans to increase its artificial intelligence investment beyond an already ambitious $50 billion target. The move places Alibaba alongside other global tech giants racing to dominate AI innovation.

CEO Eddie Wu projected that global AI investment could reach around $4 trillion within the next five years, emphasizing the need for Alibaba to keep pace. Earlier this year, the company had pledged over 380 billion yuan ($53 billion) over three years for AI development, but Wu said that figure will soon be raised. As part of its expansion, Alibaba Cloud is preparing to establish its first data centers in Brazil, France, and the Netherlands.

Wu highlighted the rollout of new Qwen models and broader “full-stack” AI technology, signaling ambitions not only in software and services but also in building the underlying infrastructure, such as chips. The announcement boosted Alibaba’s Hong Kong-listed shares by nearly 10%, while also lifting related Chinese chipmakers like ACM Research (Shanghai) and Naura Technology.

The strong market response reflects widespread investor enthusiasm for AI, despite some warnings of a potential bubble. Many see rising AI expenditure as proof of long-term profitability and confidence in the sector’s transformative potential.

China’s tech leaders—including Tencent, Huawei, Baidu, and JD.com—are joining US counterparts such as OpenAI and Meta in channeling vast resources into AI. Bloomberg Intelligence estimates that capital spending by China’s top internet firms on AI infrastructure could surpass $32 billion in 2025, up from less than $13 billion two years ago.

Competition is accelerating: Tencent is advancing its Hunyuan model, Baidu continues refining Ernie, and Alibaba just unveiled its Qwen3-Max large language model along with a suite of upgrades. This strategic pivot is paying off—Alibaba reported triple-digit growth in AI-related products last quarter, while its cloud unit delivered a 26% revenue increase, the fastest among its divisions. Overall, the company’s stock has more than doubled in 2025.

Analysts say the investment surge signals rising confidence. “Companies commit more funds when they see clear returns,” said Vey-Sern Ling of Union Bancaire Privée, noting that demand and ROI for AI services appear robust.

Still, Alibaba faces challenges, particularly restrictions on access to Nvidia’s AI processors due to US export controls. While the company is developing its own chips and has integrated Nvidia’s development tools into its cloud services for applications like robotics and autonomous vehicles, Beijing is urging local firms to reduce dependence on US hardware.

Alibaba has been working for years to build its semiconductor capabilities. In 2018, it purchased Hangzhou C-Sky Microsystems and launched its T-Head unit to advance chip design—part of a broader push by Chinese tech leaders to achieve greater self-sufficiency in critical technologies.