Shares of Alibaba Group Holding Ltd. (BABA) soared to their highest level in nearly four years after the e-commerce and cloud giant announced plans to ramp up its investment in artificial intelligence, signaling its intent to keep pace with U.S. tech giants amid the global AI arms race. The company’s U.S.-listed American Depository Shares (ADRs) jumped 9% following CEO Eddie Wu’s remarks at a conference in Hangzhou, China, where he highlighted the growing importance of AI in global markets.
Wu said global investment in artificial intelligence is projected to reach $4 trillion over the next five years, and Alibaba must expand its efforts to remain competitive. Building on its February commitment to spend more than $53 billion over three years on AI models and infrastructure, the company indicated it would increase that total, though he did not provide exact figures.
The company also unveiled Qwen3-Omni, an open-source AI model capable of handling text, images, audio, and video, marking Alibaba’s foray into generative AI. In addition, the firm announced a software partnership with Nvidia (NVDA) to integrate the chipmaker’s AI development tools, which are used for robotics and autonomous vehicle training. Financial terms of the deal were not disclosed.
The collaboration comes at a time of continued tension between the U.S. and China over technology and trade, highlighting Alibaba’s efforts to secure AI capabilities even as Beijing seeks to reduce reliance on U.S. chips. The company has been developing its own AI chip technology to complement its cloud and AI services, aiming to establish itself as a “full-stack” AI provider.
Alibaba’s cloud business, which serves clients in markets including the U.S. and Australia, will continue its global expansion with new data centers planned in Brazil, France, and the Netherlands. Cloud revenue has been a key driver of growth, rising 26% year over year in the April–June quarter. Wu emphasized that cloud and AI, alongside e-commerce, are central to Alibaba’s long-term growth strategy.
The company’s increased AI focus mirrors broader industry trends, as U.S. tech giants including Amazon (AMZN), Alphabet (GOOGL, GOOG), Microsoft (MSFT), and Meta (META) are collectively set to invest $364 billion in AI during their 2025 fiscal years, up from previous estimates of $325 billion.
Investor confidence in Alibaba’s AI push is reflected in its stock performance, which has surged more than 112% year to date. The rally was further fueled by Ark Invest’s Cathie Wood, who purchased over $16 billion of Alibaba stock on Monday, splitting the investment roughly evenly between the Ark Fintech Innovation ETF (ARK-F) and the ARK Next Generation Internet ETF (ARK-W).
With its ambitious AI spending plan, cloud expansion, and partnership with Nvidia, Alibaba is positioning itself at the forefront of the global AI race while reinforcing its status as a major player in both e-commerce and cloud computing. The stock’s recent surge underscores investor optimism that the company’s AI and cloud initiatives will continue to drive growth in the coming years.
Pump Radar
Stock Alerts