China’s Alibaba Investing $50 Bn in AI and cloud computing. Chinese tech titans Alibaba said at Monday he will spend more than $50 billion on AI(artificial intelligence) and cloud computing over the next three years, seven days before co-founder Jack Ma was seen meeting with China President Xi Jinping.
With Alibaba investors have piled into Chinese technology stocks since the start of the year. Alibaba runs some of the country’s biggest online shopping platforms — seeing its shares soar to three-year highs, AFP reported.
But in New York shares of the e-commerce behemoth nosedived after the big investment push raised worries that the spending would dent profitability.
The gains have been boosted since the Hangzhou-based firm announced robust sales growth last week, adding to signs that the sector is staging a comeback from years of gloom sparked by a government crackdown.
“The main takeaway is that Alibaba’s ambitious spending plans for fiscal this year 2025 are creating some anxiety that the company’s bottom line will take a sizeable hit, negating the momentum that it has garnered,” a note from Briefing.com.
More than nine percent shares of Alibaba were down near 16:35 GMT on Monday.
Company statement said Alibaba plans to “invest at least 380 billion ¥ ($53 billion) over the next three years to advance it’s cloud computing and AI(artificial intelligence) infrastructure”.
The firm said its strategy was aimed at “reinforcing (Alibaba’s) commitment to long-term technological innovation… (and) underscores the company’s focus on AI-driven growth”.
The statement did not detail how the company would allocate the funds or what specific projects would be supported.
It did add that the investment would exceed its total AI and cloud spending over the past decade.
On Friday Alibaba reported an eight percent bump in revenue for the three months through December, beating estimates to reach 280 billion Yuan(¥) — and triggering a 14 percent surge in its Hong Kong shares.
