Record-breaking! Alibaba (09988) plans to invest over 380 billion yuan in AIDC over the next three years, with multiple sectors expected to benefit significantly.

Alibaba Group CEO Wu Yongming announced on February 24 that in the next three years, Alibaba will invest over 380 billion yuan in the construction of cloud and AI hardware infrastructure, exceeding the total amount of the past decade. This sets the record for the largest investment in cloud and AI hardware infrastructure construction in the history of Chinese private enterprises. Wu Yongming stated, "The outbreak of AI far exceeds expectations, the domestic technology industry is booming, and the potential is huge. Alibaba will spare no effort to accelerate the construction of cloud and AI hardware infrastructure to drive the development of the entire industry ecosystem." This is the first time Alibaba has disclosed the specific amount of investment in AI infrastructure in the next three years. At last week's earnings call, Wu Yongming mentioned, "In the next three years, investment in cloud and AI infrastructure will exceed the total amount of the past decade." He expressed that Alibaba will continue to focus on three main business types: domestic and international e-commerce, AI+ cloud computing technology business, and internet platform products. In the next three years, Alibaba will increase investments in AI around three strategic cores: AI infrastructure, basic model platform and AI native applications, and the AI transformation of existing businesses. The latest financial report shows that Alibaba's capital expenditure for the third quarter of the 2025 fiscal year reached 31.8 billion yuan, a year-on-year increase of 331% and a quarter-on-quarter increase of 85%. What is the total amount of Alibaba's investment in AI infrastructure over the past decade? According to China Securities Co., Ltd. statistics, from 2015 to 2024 (calendar year), Alibaba's capital expenditure (equipment and intangible assets, excluding land) was 327.2 billion yuan, meaning that the average annual capital expenditure on equipment in the next three years is expected to exceed 110 billion yuan. Guo Zheng International Securities stated that given this quarter's capital expenditure of 31.4 billion yuan (an 85% increase quarter-on-quarter), the annual capital expenditure amount is estimated to be between 100 billion and 150 billion yuan. Sinolink also stated that based on the data of over 300 billion in capital expenditure in a single quarter, it is expected that Alibaba's full-year capital expenditure in 2025 will reach 120 billion. Of this, the capital expenditure for servers is expected to be close to 50 billion yuan, benefiting domestic server contract manufacturers; the capital expenditure for switches is expected to be around 8 billion yuan; and the capital expenditure for optical modules is estimated to be about 3.6 billion yuan. Moreover, IDC-related suppliers are expected to benefit significantly from the large-scale construction of domestic computing power in 2025. Currently, Alibaba Cloud is the leading cloud computing company in Asia, and Alibaba's Thousand Questions Common Sense large model has become a globally renowned open-source model. Recently, Alibaba launched the flagship model Qwen2.5-Max based on the MoE architecture, achieving leading scores in multiple authoritative benchmark tests, and made it available to users and businesses through the QwenChat and "Bailian" platform. As of January 31, 2025, the number of derivative models developed based on the Qwen model family on Hugging Face has exceeded 90,000, making it one of the world's largest AI model families. On February 13, Alibaba's co-founder and Chairman of the Board, Cai Chongxin, confirmed that Apple and Alibaba are collaborating to develop AI features for China's iPhone. The two parties have jointly developed an embedded system that can analyze and modify Apple's AI models for Chinese iPhone, iPad, and Mac users, with the earliest predictions for the release in May. In addition to Alibaba, the market expects that ByteDance's capital expenditure in 2025 will also increase significantly, and other companies such as Tencent and Baidu are also increasing capital expenditure, leading to a rise in demand for domestic computing power. Open Source Securities stated that benefited by the strong investment in AI by companies like ByteDance, Alibaba, and Tencent, the domestic AIDC industry chain (chips, servers, AIDC data centers, server power supplies, diesel generators, precision air conditioning & liquid cooling, switches and chips, optical modules, AEC, MPO, etc.) is expected to benefit comprehensively. Sinolink said that the iterative upgrade of domestic large models and the unexpected increase in investment by major companies will continue to drive strong demand for domestic computing power, and suggested focusing on IDC, servers, switches, optical modules, liquid cooling, and other segments. EB SECURITIES stated that after the strong capital expenditure by Alibaba was validated, investment in domestic computing power is expected to reach a new level, and they are optimistic about data center HVDC and server power supply segments. The application of HVDC in China started from the communications network and then expanded to internet enterprise data centers, leading to rapid growth in demand for applications; overseas applications are still in the early stages, with Vertiv already having a 400V HVDC power supply solution for data centers, which is expected to be gradually promoted in the future. The IDC power supply solution jointly developed by Alibaba and Delta integrates multiple core components in a flexible way, with higher efficiency and smaller footprint, and has been widely deployed by Alibaba in large scale. This article is reprinted from Cai Lianshe, edited by GMTEight: Chen Wenfang.