Quick overview

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Alibaba shares jumped to their highest level in four years after the business revealed plans to ramp up AI spending beyond an initial target of $50 billion.  Alibaba must keep up with the estimated $4 trillion in global investment in artificial intelligence over the next five years, according to CEO Eddie Wu.

He stated that the business will shortly expand on a plan announced in February to invest over 380 billion yuan ($53 billion) in the development of AI infrastructure and models over three years. His cloud division plans to open its first data centers in Brazil, France, and the Netherlands within the next year. Currently, it provides services from the US to Australia.

Wu’s predictions, which were made as he described plans to introduce Qwen models and “full-stack” AI technology, reflected Alibaba’s expanding goals to create both services and the hardware, like chips, that support the technology. In Hong Kong, its stock increased by up to 78 percent, supporting the growth of Chinese chipmaker ACM Research (Shanghai) Inc. by up to 15%, along with NAURA Technology Group Co. by up to 10%.

Markets currently view such expenditures as an indication of growing corporate confidence in the technology, despite warnings from skeptics of a bubble in the making. Wu said at a developer conference in Hangzhou on Wednesday, “The industry’s development speed far exceeded what we expected, and the industry’s demand for AI infrastructure also far exceeded our anticipation.”.

“We’re moving forward with the 380 billion investment in AI infrastructure.

The largest tech firms in China are investing previously unheard-of amounts of money in AI. They follow in the footsteps of American counterparts who have been spending heavily, such as OpenAI and Meta Platforms Inc., aiming to develop and spread a technology that has the power to upend economies and shift the geopolitical balance