Alibaba to Invest $52 Billion in AI and Cloud Over Next Three Years

Alibaba Group (BABA) announced plans to invest more than $52 billion in artificial intelligence (AI) and cloud infrastructure over the next three years, marking its largest investment in these areas to date.

The company stated that it will allocate at least 380 billion yuan ($52.4 billion) toward expanding its AI capabilities and cloud computing infrastructure, surpassing its total AI and cloud investments over the past decade. This move reinforces Alibaba’s commitment to AI-driven growth and solidifies its position as a leading global cloud provider.

Alibaba CEO Eddie Wu had previously hinted at “aggressive” investments in cloud and AI, but this announcement is the first time the company has disclosed a specific figure.

Jefferies: Alibaba Cloud Leads in Capital Expenditures

Analysts at Jefferies, who have a “buy” rating and a $160 price target on Alibaba stock, noted that the investment aligns with recent earnings guidance and market expectations. They highlighted that Alibaba Cloud remains a dominant player in the sector, outpacing competitors in capital expenditures and contributing to advancements in artificial general intelligence (AGI) and open AI strategies.

Stock Performance

Despite the major investment announcement, U.S.-listed shares of Alibaba fell 3% in premarket trading Monday. However, Alibaba’s stock has surged nearly 90% in the past 12 months, reaching $143.75 following better-than-expected quarterly earnings last week.