In the latest turn of events, Alibaba Group Holding Ltd. plans to invest more than 380 billion yuan, roughly amounting to $53 billion in the coming 3 years, to develop data centres to fuel its ambition of becoming the leader in AI.
Alibaba, the internet giant co-founded by Jack Ma, is set to ramp up its investment in AI and cloud computing, surpassing its spending over the past decade. Alibaba aims to be a crucial partner for companies advancing AI applications, providing the computing power needed as models continue to evolve.
Moreover, according to Bloomberg Intelligence, Alibaba is investing billions in the pursuit of AGI. However, replicating human-level intelligence would require a major technological breakthrough. Furthermore, whether the current generation of models can attain AGI remains uncertain, with any potential payoff vague and unpredictable.
Fear Among the Investors
This news comes as investors question whether major tech companies overestimate future demand for AI services or underestimate the capital required to develop them.
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On Friday, TD Cowen analysts noted that Microsoft Corp. is terminating leases for significant data centre capacity in the US, potentially signalling concerns about overbuilding AI computing resources in the long term. Meanwhile, Alibaba’s Hong Kong shares dropped by 3% on February 24, 2025.
