A multi-billion plan for cloud and proprietary chips: chasing the “Holy Grail” of Artificial Intelligence
Alibaba back in the spotlight
Alibaba’s Hong Kong-listed stock has surged 84% since the beginning of 2025, adding another 6% on September 12. The group raised $3.2 billion in convertible bonds to finance China’s largest national plan for AI infrastructure and cloud services.
Qwen models take on OpenAI and DeepSeek
The company unveiled updates to its Qwen large language models, designed to compete with OpenAI and DeepSeek. The new versions, Qwen3-Next and Qwen-3-Max-Preview, boast up to one trillion parameters.
Proprietary chips: Alibaba and Baidu reduce reliance on Nvidia
Reports suggest Alibaba and Baidu are using self-developed chips for AI training, reducing reliance on Nvidia. Baidu’s shares jumped 13%, hitting their highest level since October 2024.
Regulatory comeback and AGI ambition
After years of regulatory pressures in China, Alibaba has re-emerged as a leader in AI, openly targeting Artificial General Intelligence (AGI), widely regarded as the industry’s “Holy Grail”.
Sector momentum
Oracle also boosted the AI rally with record spending forecasts. Analysts highlight that Alibaba’s initiatives shifted investors’ focus to its AI potential, overshadowing fears of food-delivery price wars.
Opportunities vs risks
Bloomberg Intelligence warns that despite strong demand for cloud services, returns could be limited by low margins and high capital costs. In fiscal 2025, Alibaba’s cloud division increased adjusted EBITDA by only $86 million. Tencent, analysts say, remains better positioned for short-term AI gains.
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