Alibaba Group (NYSE: BABA) has announced plans to invest $53 billion (¥380 billion) in artificial intelligence (AI) and cloud computing infrastructure over the next three years, marking its largest-ever investment in these fields. The commitment highlights the Chinese e-commerce giant’s ambitions to position itself as a global leader in AI-driven cloud services, competing with US tech giants such as Microsoft, Meta, and Amazon.
The funding will be used to expand Alibaba’s data centres, strengthen its AI infrastructure, and integrate AI across its core businesses, including e-commerce, cloud computing, and consumer applications. Alibaba Cloud, the company’s fastest-growing division, saw an 11% year-on-year revenue increase in Q4 2024, with AI-related product revenue achieving triple-digit growth for six consecutive quarters.
The investment comes as Alibaba shifts focus following years of regulatory scrutiny in China. CEO Eddie Wu has described AI as a “once-in-a-generation opportunity”, stating that Artificial General Intelligence (AGI) is now a core objective for the company. Wu’s vision aligns with China’s broader push to compete in AI against Western counterparts, including the likes of OpenAI and Google.
Alibaba’s move follows a series of high-profile AI investments by US firms, with Microsoft allocating $80 billion to AI data centres this fiscal year and Meta planning to spend $65 billion in 2025. However, US sanctions limiting Chinese firms’ access to advanced Nvidia AI chips may slow Alibaba’s technological advancements, while also helping control costs compared to its Western rivals.
Meanwhile, Alibaba has also made strategic AI investments in leading Chinese startups such as Moonshot and Zhipu, alongside unveiling its Qwen AI model, which has demonstrated strong performance in benchmark tests. Additionally, Apple is incorporating Alibaba’s AI technology into Chinese iPhones, a major endorsement of its AI capabilities.
Alibaba’s fourth-quarter earnings further bolstered investor confidence, with revenue rising 8% to ¥280.2 billion ($36.96 billion) and net income hitting ¥48.9 billion ($6.45 billion). The company’s stock has gained over 68% in US markets since the start of 2025, reflecting renewed optimism about its AI-driven strategy.
With the Chinese government backing AI development and Alibaba now at the forefront of the country’s AI push, the company is set to play a pivotal role in shaping China’s digital economy.
