Alibaba Group emphasized that the initiative reflects its strategic focus on AI-driven expansion
Chinese holding Alibaba Group has announced plans to invest CNY380 billion ($52.4 billion) in cloud computing and artificial intelligence (AI) infrastructure over the next three years, South China Morning Post reported.
The initiative marks China’s largest private-sector investment in computing infrastructure and represents a significant increase compared to the company’s AI-related spending over the past decade, according to the report.
The group’s CEO Eddie Wu Yongming stated in a recent earnings call that Alibaba intends to increase spending on AI and cloud computing infrastructure, aligning with broader industry trends. The company emphasized that the initiative reflects its strategic focus on AI-driven expansion and its position within the global cloud computing market, the report added.
The announcement follows rising interest in AI development in China, with state news outlet Xinhua reporting on the plan as part of broader national efforts to advance AI adoption. Analysts have noted that the scale of Alibaba’s investment suggests an effort to expand beyond its core e-commerce business, positioning cloud computing and AI as major growth areas.
While details of how the funds will be allocated remain unclear, analysts highlight the competitive landscape between open-source and closed-source AI development models as a key factor shaping future AI infrastructure investments.
Alibaba’s latest earnings report showed strong financial performance, with Alibaba Cloud reporting a 13% year-on-year revenue increase, reaching CNY31.7 billion for the December quarter. The unit has recorded triple-digit AI-related product revenue growth for six consecutive quarters, making it the fastest-growing segment within the company over the past three years, according to the report.
The report also highlighted that a recent research note from Morgan Stanley indicated that Alibaba Cloud revenue could double over the next three years, potentially reaching CNY240 billion by 2028.
At end-January, Alibaba Group had launched an upgraded version of its Qwen 2.5 AI model, claiming it outperforms models from DeepSeek, OpenAI and Meta.
“Qwen 2.5-Max outperforms … almost across the board GPT-4o, DeepSeek-V3 and Llama-3.1-405B,” Alibaba’s cloud unit said on its WeChat account.
The launch followed DeepSeek’s disruptive entry into the market, marked by the January 10 debut of its AI assistant powered by the DeepSeek-V3 model and the January 20 release of its open-source R1 model. DeepSeek is a chatbot created by the Chinese AI company DeepSeek.
