Alibaba to invest $52 billion in AI after Qwen 2.5 model’s breakthrough success
Nickie Louise
Posted On February 24, 2025
Alibaba is making a massive bet on artificial intelligence. The Chinese tech giant announced on Monday that it plans to invest over $52 billion in AI and cloud computing over the next three years. The move follows the success of its Qwen 2.5-Max model, which the company says has outperformed DeepSeek-V3.
This investment is the largest Alibaba has made in AI and cloud infrastructure, exceeding its total spending in the sector over the past decade. The company hinted at its expansion plans last week during its earnings report but kept the numbers under wraps until now.
“Alibaba said on Monday it plans to invest at least 380 billion yuan ($52.44 billion) in its cloud computing and artificial intelligence infrastructure over the next three years,” Reuters reported.
Alibaba pulled in 280.15 billion yuan in revenue for the quarter ending December 31, slightly surpassing analyst expectations. The company’s stock has climbed over 68% this year, fueled by investor confidence in its AI and cloud strategy.
China’s tech giants are racing to secure a foothold in AI, and Alibaba isn’t alone. ByteDance, the parent company of TikTok, is reportedly setting aside more than 150 billion yuan for capital expenditures this year, with a significant portion directed at AI projects.
Alibaba’s push into AI and cloud signals a larger shift in China’s tech industry, where companies are pouring resources into artificial intelligence to stay competitive. The next few years will reveal whether these massive bets pay off.
Alibaba’s AI Push Extends Beyond Its Own Models
Alibaba isn’t just focused on building its own AI—it’s backing other Chinese AI startups as well. In late 2023, the company joined Tencent and other investors to invest $340 million in Zhipu, a rising competitor to OpenAI.
Zhipu has positioned itself as one of China’s top generative AI startups, playing a key role in shaping the country’s AI landscape. Meanwhile, tech giants like Alibaba, Tencent, and Baidu aren’t just investing—they’re actively developing their own AI models and rolling out new products powered by this technology.
