Alibaba to lead AI capital spending among China’s Big Tech firms amid strong market demand
Alibaba Group Holding expects to remain the top spender on artificial intelligence investments among major Chinese technology companies, supported by continued strong revenue growth from its AI and cloud computing division. The company signalled its intention to accelerate AI-related capital expenditure as demand for computing power and enterprise-level AI solutions continues to expand across China.
Alibaba Cloud, the company’s cloud and AI arm, reported 34 per cent year-on-year revenue growth for the quarter ending September 30, reaching 39.8 billion yuan. It marked the fourth consecutive quarter in which the unit delivered double-digit growth, reflecting rising interest from businesses seeking advanced cloud infrastructure and AI capabilities. During the same period, Alibaba’s overall revenue for its financial second quarter grew to 247.8 billion yuan. The results highlight the increasing role of cloud services and intelligent computing in the company’s long-term strategy. Alibaba owns the South China Morning Post.
The strong performance of Alibaba Cloud also places it in line with leading US cloud providers in terms of growth pace. According to a research note by Jefferies equity analyst Thomas Chong, Microsoft Azure posted 40 per cent year-on-year growth in the same quarter, while Google Cloud recorded a 33.5 per cent increase. The comparison suggests that Alibaba’s push in AI-driven services is keeping pace with global competitors, despite challenges in international markets and rising competition at home.
Analysts say that Alibaba’s expanding investment plans signal the company’s ambition to play a central role in supporting China’s broader efforts to strengthen its position in the global AI landscape. As the need for powerful computing infrastructure grows across industries such as finance, manufacturing, and digital services, Chinese tech firms are racing to secure enough resources to train increasingly complex AI models. Alibaba’s early commitment to cloud and AI infrastructure gives it an advantage as companies seek scalable platforms capable of handling advanced workloads.
In recent quarters, Alibaba has been repositioning its cloud business to meet rising enterprise demand, introducing upgraded services that integrate large language models, data processing tools, and industry-specific AI applications. Executives have repeatedly noted that AI-driven workloads are becoming a major driver of cloud usage in China, prompting the company to increase its investment in high-performance computing centres and model training facilities.
Market observers believe that Alibaba’s capital spending plans reflect both immediate demand and long-term strategic priorities. While Chinese tech companies are navigating regulatory adjustments and economic headwinds, AI infrastructure remains a high-growth sector supported by government initiatives and enterprise digital transformation. As businesses accelerate the adoption of AI tools to improve productivity and automate operations, providers like Alibaba Cloud are likely to see continued revenue momentum.
With its cloud division maintaining strong performance and its AI initiatives gaining traction, Alibaba appears set to remain a leading force in China’s rapidly developing AI market. The company’s commitment to expanding its AI-related capital expenditure suggests it sees significant opportunity ahead, as both domestic and global competition intensifies.
