MW Alibaba's stock falls on expensive AI-investment pledge

By Steve Gelsi

Online retailer plans to spend $53 billion over the next three years on AI and cloud technology

Alibaba Group Holding Ltd.'s U.S.-listed stock fell 2.7% in premarket trading on Monday after the online retailer said it plans to spend about $53 billion over the next three years on its cloud computing and Artificial Intelligence infrastructure.

The spending plan amounts to nearly eight times its most recent quarterly profit of $6.7 billion.

"The investment, which exceeds Alibaba's total AI and cloud spending over the past decade, underscores the company's focus on AI-driven growth and its role as a leading global cloud provider," the online retailer $(BABA)$ said.

Alibaba said the investment will help it grow its cloud hosting services business as the company's "clearest revenue driver" in the AI business.

Alibaba's cloud revenue grew by 11% in its most recent fiscal quarter. Its AI-related product revenue increased by triple digits for the sixth quarter in a row, the company said in a blog entry.

"With this investment, Alibaba is scaling up its AI capabilities and cloud infrastructure to support the next wave of technological advancements, ensuring businesses and developers have the tools to innovate and grow," the company said.

Prior to Monday's moves, Alibaba's stock rose 5.7% in the previous session. The stock has risen 69.4% so far in 2025.

-Steve Gelsi

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February 24, 2025 07:22 ET (12:22 GMT)

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