Alibaba Group Holding is spearheading China’s Big Tech sector in the race for global leadership in artificial intelligence (AI) technology and infrastructure with its spending plan, competing with US giants like Apple and Microsoft for first-mover advantage, analysts said.
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The e-commerce leader’s 380 billion yuan (US$52.4 billion) capital expenditure for computing resources and AI infrastructure is the biggest allocation yet by a private Chinese entity, a move that is likely to draw local peers like Tencent Holdings and ByteDance into the fray, they added.
Alibaba, based in Hangzhou in eastern Zhejiang province, owns the South China Morning Post.
The AI-focused spending budget, triggered by quick availability of open-source large language models (LLMs) for businesses to adapt, mirroring similar but bigger plans in the US amid heightened tech war and geopolitical tensions. The massive investment in AI infrastructure may be about “democratising generative AI [GenAI] to the local markets”, according to Su Lian Jye, chief analyst at research firm Omdia.
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“As China and the US are the two largest single markets, investing in AI data centres allows vendors like Alibaba, Apple, and OpenAI to tap into the economies of scale and offer their services at a much cheaper cost,” Su added. “Whichever market can accelerate GenAI adoption and innovation will have an upper hand in the tech race.”
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