Alibaba Group Holding Ltd. (BABA, 9988.HK) has unveiled plans to invest over 380 billion yuan ($53 billion) in artificial intelligence (AI) infrastructure over the next three years, reaffirming the e-commerce giant’s ambitious drive to become a leader in the burgeoning AI sector. This strategic commitment will primarily fund the development of data centres to support AI growth, positioning Alibaba as a formidable contender in the global AI race.
The investment marks a significant increase in the company’s AI and cloud computing capabilities, surpassing the total amount spent by Alibaba over the last decade. The company’s target is to become a key player in providing the computing power needed for AI development as models continue to evolve and demand for computational resources increases.
This major investment underscores Alibaba’s push into AI at a time when big tech companies globally are committing billions of dollars to AI infrastructure. While Solana and DeepSeek models are disrupting the market by creating AI at lower costs, industry leaders such as Nvidia’s Jensen Huang argue that the future of technology is AI-driven, and major players like Alibaba are preparing for a transformative shift in the industry.
Despite the ambitious goals, Alibaba’s three-year investment plan lags behind U.S. giants such as Microsoft and Meta, who are significantly outspending Alibaba on AI data centers. Microsoft, for instance, plans to allocate $80 billion in the current fiscal year alone for AI infrastructure, while Meta has earmarked $65 billion for its 2025 investments. The Chinese tech firm, however, faces challenges including U.S. sanctions that limit its access to advanced Nvidia chips, curbing its AI capabilities.
Alibaba’s recent focus on AI marks a strategic shift for the company, which has faced several challenges since the government crackdown in 2020. CEO Eddie Wu’s emphasis on Artificial General Intelligence (AGI) aligns with the company’s broader ambition to lead in AI technology, signaling that Alibaba is positioning itself to compete with U.S. tech giants like OpenAI, Alphabet, and Microsoft.
The move also highlights Alibaba’s determination to rebound from its recent struggles. Under new leadership, Alibaba has demonstrated its commitment to refocusing its investments in AI and e-commerce, areas that continue to drive the company’s growth. The company’s market value has risen by more than $100 billion in 2025, signalling investor confidence in its AI potential.
Along with significant investments in AI, Alibaba has made strides in the AI startup ecosystem, backing promising companies such as Moonshot and Zhipu. It has also leveraged its cloud business, crucial to the development of AI technologies, by slashing prices to regain lost customers.
Despite the challenges, including geopolitical factors and the competition for AI talent, Alibaba’s bold push into AI infrastructure demonstrates its long-term vision to emerge as a global leader in the AI space. As the demand for advanced AI technology rises, Alibaba’s decision to prioritise investment in this sector positions the company to capitalise on the next era of technological innovation.
