Alibaba Shares Surge After Major AI Announcement Including a New Chip and a Massive Data Center

Alibaba shares climbed Tuesday after the Chinese technology giant unveiled a powerful new artificial intelligence chip and plans for a massive expansion of its global data center capacity, escalating its push to compete in the infrastructure race underpinning the AI boom.

Shares of Alibaba rose around 3% in Hong Kong trading following the announcements at the company’s annual Apsara Conference in Hangzhou. Intraday gains also went as high as 5% as investors reacted to a sweeping AI roadmap spanning semiconductors, cloud computing infrastructure and increasingly powerful Qwen models.

At the center of the strategy is the Zhenwu V900, Alibaba’s next-generation AI accelerator. The processor, the company claimed, delivers three times the performance of its predecessor, the Zhenwu M890, which was released in May.

The Zhenwu V900 is expected to enter mass production and become commercially available in the first quarter of 2027. Alibaba’s existing Zhenwu processors are already being used by more than 650 customers in industries including automotive, finance, energy and manufacturing.

The announcement comes as Chinese technology companies work to strengthen their domestic semiconductor capabilities amid U.S. restrictions on exports of some of Nvidia’s most advanced AI processors to China. Huawei, another major Chinese technology player, last week unveiled new AI infrastructure that it said could scale to as many as one million processors.

But Alibaba’s ambitions extend far beyond chips. CEO Eddie Wu said Alibaba Cloud plans to expand its global data center capacity to more than 20 gigawatts by 2032, a scale that illustrates the enormous amounts of computing power and electricity the company expects the next generation of AI systems to require.

Alibaba said customer demand for AI remains exceptionally strong, although shortages across the AI data center supply chain could constrain the speed of expansion. The buildout would put Alibaba deeper into a global infrastructure spending race that has drawn billions of dollars from the world’s largest technology companies.

Nvidia earlier this month outlined plans to work with partners in Australia to support up to 2 gigawatts of AI infrastructure in the country by 2027. Meta, meanwhile, announced plans in July for its first Canadian data center, a 1-gigawatt facility in Alberta expected to cost approximately $9 billion.

Alibaba is simultaneously preparing a major expansion of its Qwen family of AI models. The company also said its next-generation Qwen 4 is currently being trained, while future Qwen 4.5 and Qwen 5 models are also on its roadmap.

Wu said Alibaba ultimately plans to train a model containing between 5 trillion and 10 trillion parameters, underscoring the computing requirements behind the company’s infrastructure investments.

Wu compared the current stage of artificial intelligence development with the early years of electrification, arguing that the technology remains at the beginning of a much larger transformation. “AI coding is simply the light bulb of the machine intelligence era,” Wu said, predicting a much longer growth runway for machine intelligence.