Alibaba Shares Surge as It Boosts Bet on AI, Rolls Out New Model—Update

By Tracy Qu and Sherry Qin

Alibaba Group shares surged after the company pledged to invest more than $53 billion in artificial intelligence--above its original target--and released a new model.

The Chinese tech titan's Hong Kong-listed stock rallied on Wednesday, helping it more than double gains so far this year. Shares closed 9.2% higher at HK$174.00, its highest level in four years and outperforming the Hang Seng Tech Index's 2.5% advance.

The Hangzhou-based company's latest upswing came after Chief Executive Eddie Wu said the company will increase spending on AI and cloud infrastructure above its February pledge of 380 billion yuan, equivalent to $53 billion, deploying the funds over three years. He didn't provide a new target.

"The AI industry has developed much faster than we expected, and demand for AI infrastructure has also far exceeded our expectations," Wu said.

Fueling further optimism was Qwen3-Max, the latest addition to Alibaba's flagship AI model series, which it describes as its "largest and most capable" large-language model yet.

The preview version ranked among the top three globally on third-party benchmarks LMArena leaderboard, placing it alongside Google's Gemini, Anthropic's Claude, and OpenAI's ChatGPT.

Qwen3-Max, with more than one trillion parameters, boasts strong coding and agentic capabilities, the company said in a social-media post.

Alibaba is also doubling down on building homegrown chips, a crucial foundation for training and deploying the Qwen3-Max model. By advancing such models, alongside its homegrown chip ecosystem, the tech giant is signaling its ambition to control the full AI stack--from hardware to cloud services to application.

Alibaba's push comes as Chinese tech giants are racing to develop LLMs to rival offerings from foreign companies like OpenAI and Anthropic.

Baidu, Tencent Holdings and ByteDance have all launched their own products, while homegrown startups such as DeepSeek are rapidly gaining ground.

Morningstar analyst Chelsey Tam said Alibaba's larger capital-expenditure guidance is a good sign that demand for AI infrastructure is even stronger than expected.

"More demand means a more positive outlook," Tam said.

Nomura's Jialong Shi added markets seem to be viewing the management's outlook for AI demand in China as upbeat. That might have soothed worries about increasingly tough competition in the AI space and the potential formation of an asset bubble as more companies enter the space and investors pile into stocks.

Another tailwind for Alibaba's stock came in the form of news that two of Cathie Wood's Ark Invest funds reopened positions in the tech company, signaling a rekindling of interest from abroad in Chinese tech.

The two funds' investments in Alibaba's American depositary shares total around $16.3 million, according to holdings reports.

Securities and Exchange Commission filings show that this is Ark's first investment or proxy voting record in Alibaba since September 2021, when the Chinese internet giant was grappling with a regulatory crackdown on the country's tech sector.

Alibaba's investment plan and model release add to a broader upswing in Chinese tech stocks, which have been powering equities markets onshore and offshore as advancements bolster investors' conviction in China's AI sector.

In Hong Kong, SMIC--the largest contract chip maker in China--rose as much as 7.8%, while China's No. 2 foundry, Hua Hong, advanced as much as 9.0%. Naura Technology, the country's biggest chip-equipment maker, climbed by the 10% daily limit.

"China is building up a self-contained virtuous cycle" in the AI supply chain, Morningstar analyst Phelix Lee said.

A flurry of AI progress by Chinese tech giants "signals stronger confidence in the performance of China-made models, which supports demand for semiconductors, benefiting both foundries like SMIC & Hua Hong and upstream equipment plays," he said.

--Jason Chau contributed to this article.

Write to Tracy Qu at tracy.qu@wsj.com and Sherry Qin at sherry.qin@wsj.com

(END) Dow Jones Newswires

September 24, 2025 06:47 ET (10:47 GMT)