Alibaba’s AI Investment Surge Propels Stock to Four-Year Peak

Alibaba just placed a billion-dollar bet on artificial intelligence—and Wall Street's eating it up.

The Spending Spree

China's e-commerce giant is pouring unprecedented resources into AI development, triggering the stock's strongest rally since 2021. Investors are scrambling as shares hit levels not seen in four years.

The AI Arms Race

This isn't just about keeping pace with rivals. Alibaba's massive AI budget signals a fundamental shift in corporate strategy—from e-commerce dominance to technological supremacy. The move positions them directly against global tech titans investing heavily in machine learning infrastructure.

Market Reaction

Traders pushed shares up double-digits as analysts revised price targets upward. The surge demonstrates how quickly sentiment shifts when legacy companies embrace disruptive technology—even if they're late to the party.

Of course, Wall Street would cheer any spending plan that distracts from actual revenue numbers. Nothing like some shiny AI promises to make investors forget about pesky things like profitability.

Alibaba plans to spend 380B yuan on developing AI models

🇨🇳 ALIBABA TO BOOST AI SPENDING BY $53 BILLION

Alibaba just threw its hat into the AI arms race, loudly.

CEO Eddie Wu says the company wants to become a “full-stack AI service provider,” not just dabble in chatbots and image filters.

They’re putting 380 billion yuan (yes,… pic.twitter.com/gUF5iOR7Js

— Mario Nawfal (@MarioNawfal) September 24, 2025

Bloomberg reported that Wu told a developer conference in Hangzhou that the Chinese multinational conglomerate will see an acceleration in global investment in AI. He also revealed that Alibaba will soon add to its plan to spend more than 380 billion yuan on developing AI models and infrastructure over three years to keep up with its competitors.

The e-commerce giant revealed in February that it plans to invest around $52.44 billion in its cloud computing and AI infrastructure over the next three years. The firm said its total investment amount exceeds its spending in AI and cloud computing over the past decade.

“The industry’s development speed far exceeded what we expected, and the industry’s demand for AI infrastructure also far exceeded our anticipation. We are actively proceeding with the 380 billion investment in AI infrastructure, and plan to add more.”

-Eddie Wu, CEO of Alibaba Group Holdings.

The Hangzhou-based firm has also seen increased growth in its AI-related products. Alibaba reported triple-growth in its AI-related products in the most recent quarter.

The tech company’s Cloud Intelligence division became the group’s fastest-growing business unit in the previous quarter. Alibaba recorded a better-than-expected 26% surge in sales, to 33.40 billion yuan ($4.67 billion). Its increased growth in the AI sector has attracted investors who have cheered these results and initiatives, sending its stock to more than double its price over the course of the year.

Wu also noted that the firm had cumulatively invested more than 100 billion yuan in AI Infrastructure and AI product research and development over the past four quarters. He acknowledged that the company’s investment in AI has started to show tangible results, and Alibaba is expecting an increasingly clear path for AI to drive its robust growth.

Alibaba unveils Qwen Series models

Alibaba raised $3.2 billion in convertible bonds earlier this month, which was expected to be the country’s largest AI infrastructure investment. The company also included fresh upgrades to its Qwen Series models, aiming to compete with DeepSeek and OpenAI.

The e-commerce giant also unveiled its new Qwen3-Max large language model and a flurry of other improvements to its suite of AI offerings. Wu highlighted that Alibaba aims to become a full-stack AI service provider, including selling AI products like model-as-a-service to suit various needs.

The company said the Qwen3-Max model is its most powerful to date, containing more than 1 trillion parameters. Chief technology officer at Alibaba Cloud, Zhou Jingren, said the variables determine how an AI system processes information, and show particular strength in code generation and autonomous agent capabilities.

The Qwen3-Max model’s autonomous agent capabilities allow the AI system to operate with fewer human prompts than a chatbot like ChatGPT. The AI model can also make decisions and take action independently towards a goal set by the human user. 

The tech company cited third-party benchmarks like the Tau2-Bench. Alibaba noted that the model outperformed rival products, including DeepSeek-V3.1 and Anthropic’s Claude in certain metrics.

Alibaba also introduced the Qwen3-Omni model, a multimodal, immersive system useful for VIRTUAL and artificial reality applications such as smart glasses and intelligent cockpits. Wu stated that the speed of AI industry development and demand have far exceeded the company’s expectations.

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