Like its U.S. counterparts, Alibaba is going all-in on generative AI. Its cloud computing business saw an 11 percent year-over-year increase in revenue in December 2024. AI-related product sales have experienced triple-digit growth for the sixth consecutive quarter, signaling strong enterprise demand for AI-powered solutions.

The investment signals Alibaba’s ambition to compete with AWS, Microsoft Azure, and Google Cloud as it expands beyond its core e-commerce business.

Alibaba said the total investment amount exceeds the company's spending in AI and cloud computing over the past decade.

Alibaba announced plans to invest at least RMB380 billion (US$53 billion) over the next three years to advance its cloud computing and AI infrastructure, underscoring the company’s focus on AI-driven growth and its role as a leading global cloud provider, according to a statement by Alibaba’s Cloud unit on Monday.

Alibaba Group Holding Ltd.’s U.S.-listed stock fell nearly 7% 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.

Chief executive Eddie Wu said AI was "the kind of opportunity for industry transformation that only comes around only once every few decades."

The Chinese technology giant first mentioned the plan last week when it reported results but didn’t provide a specific figure.