Alibaba Expands AI Cloud Push With $53B Infrastructure Investment Plan

Alibaba Group Holding Limited Sponsored ADR (NYSE:BABA) is expanding its artificial intelligence operations with a three-year, $53 billion investment plan aimed at building over 20 gigawatts of global data-center capacity by 2032. The initiative includes expanding projects into Europe and the Middle East alongside the launch of its new Zhenwu V900 AI chip, which offers three times the performance of its M890 chip to support growing cloud demand.

The aggressive push comes as cloud and compute revenue rose 45% year over year to $7.1 billion in the June quarter, with AI products generating $1.8 billion. Segment adjusted EBITA grew 133% to $830 million. Wall Street analysts lifted price targets following the announcements, sending shares of Alibaba up 5.36% to $111.40 USD. The strength in cloud services helps balance mixed results in retail, where customer-management revenue fell around 5% even as e-commerce adjusted EBITA edged up 2%.

Investors will look ahead to Alibaba's September-quarter earnings report, expected between late October and mid-November. Consensus estimates project earnings of 10.97 yuan per share on revenue of 271.12 billion yuan, up from 4.36 yuan per share and 247.80 billion yuan in the same period last year. Markets will also monitor progress on its planned data-center builds in international markets and cloud expansion trends.