Alibaba Reportedly Weighs Massive $69 Billion AI Data Center Investment Surge
February 2, 2026
In a move underscoring the intensifying global race for artificial intelligence supremacy, Chinese tech giant Alibaba Group is reportedly considering a dramatic increase in its capital expenditure for AI-dedicated data centers. According to a new report, the company is evaluating plans to invest up to $69 billion (480 billion yuan) over a three-year period, a significant jump from its previously announced commitment. The report, originating from Chinese media outlet LatePost and citing an unnamed insider, suggests Alibaba Cloud could raise its planned infrastructure spending by nearly a third. This would elevate the target from the $52.4 billion (380 billion yuan) pledge made in early 2025 for investments "in the next three years." The potential escalation follows a year of aggressive spending, with Alibaba revealing in a November earnings call that it had already allocated approximately $16 billion to AI-related purchases, including data center builds, in the preceding twelve months. To rapidly scale its computational capacity, Alibaba has employed unconventional strategies. The insider told LatePost that the company "even bought large quantities of consumer-grade graphics cards like the RTX 4090 to build inference clusters and supplement inference throughput." Concurrently, Alibaba is focusing on efficiency gains, claiming in October 2025 that its proprietary hardware "pooling" system could reduce GPU utilization by 82 percent. The timing of this potential capex hike aligns with recent regulatory developments. The Chinese government recently granted Alibaba, alongside peers ByteDance and Tencent, permission to purchase up to 400,000 of Nvidia's advanced H200 GPUs. While reliant on foreign chips, Alibaba is also developing its own AI silicon through its T-Head unit, with the Zhenwu 810E chip being its latest offering. This massive investment push is being funded through substantial capital raises. In 2025 alone, Alibaba sought $3.2 billion via zero-coupon convertible bonds in September, following a $1.53 billion bond raise in July. The capital is fueling a rapid international expansion beyond China, with new data centers launched in 2025 in markets including Malaysia, South Korea, Mexico, and Thailand. The implications for the cloud and AI competitive landscape are profound. A recent Omdia report cited by the South China Morning Post indicated Alibaba Cloud already commands a dominant 35.8 percent share of China's AI cloud market. A near-$70 billion investment would not only solidify its domestic lead but also significantly bolster its ability to compete for global AI workloads, directly challenging Western hyperscalers. The reported plan signals that the financial arms race to build the foundational infrastructure for the AI era is accelerating, with profound consequences for global technology supply chains and market dynamics.
Source: datacenterdynamics
