By George Glover

Alibaba Group stock was tumbling Monday after the Chinese online retailer failed to wow investors with plans for an artificial-intelligence spending spree.

The company's Hong Kong shares closed 2% lower, and its American depositary receipts dropped 3% to $139.49 ahead of the U.S. opening bell.

The losses came after Alibaba said in a post on its official blog that it would pour at least 380 billion yuan ($52.4 billion) on cloud computing and AI over the next three years, adding that the spending drive "underscores the company's focus on AI-driven growth and its role as a leading global cloud provider." The company had signaled that it would aggressively boost its capital expenditures when it reported better-than-expected quarterly earnings Thursday, but stopped short of giving a specific figure.

The $52 billion figure is more than Alibaba has spent on cloud and AI over the past 10 years, and shareholders likely are worried that the splurge will chip away at the company's bottom line. Investors also have punished U.S. tech giants such as Amazon.com and Google owner Alphabet this month after their capital spending guidance came in well above expectations.

The dip Monday could take some of the shine off a strong start to the year for Alibaba. Its ADRs have jumped 70% already in 2025, powered higher by the expectation that China's faltering economy will soon rebound and the belief that the rapid rise of startup DeepSeek's newest model could kick off an AI boom in the Asian nation. The benchmark S&P 500 index has risen 2.2% over the same period.

Write to George Glover at george.glover@dowjones.com

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February 24, 2025 06:31 ET (11:31 GMT)

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