Alibaba CEO Eddie Wu has publicly countered concerns raised by Google's Sundar Pichai regarding a potential artificial intelligence (AI) bubble, affirming Alibaba's commitment to aggressive investment in the sector. This divergence in views highlights the uncertainty surrounding AI investments in Silicon Valley.
Wu's optimism is rooted in the strong demand for AI-related products and services, particularly within Alibaba's cloud computing unit. During an earnings call on Tuesday, November 25, 2025, Wu, who also serves as Alibaba Cloud's chairman, indicated that the company might increase its capital expenditure on AI infrastructure due to this high demand. He suggested that the previously announced RMB 380 billion (US$53 billion) investment over three years in AI and cloud infrastructure might be increased. Wu stated that Alibaba doesn't foresee an AI bubble in the next three years, as AI resources will remain scarce.
Alibaba Cloud reported a 34% year-on-year revenue increase, reaching 39.8 billion yuan (US$5.6 billion) for the quarter ending September 30. This growth aligns with that of its American counterparts, Microsoft's Azure and Google Cloud. Jefferies equity analyst Thomas Chong anticipates continued strong growth for Alibaba Cloud in the upcoming quarter.
Alibaba's dedication to AI extends beyond financial investment. The company has made significant strides in developing its own AI models, including the Qwen series. The Qwen app, featuring a multipurpose chatbot, exceeded 10 million downloads within a week of its launch, demonstrating its growing popularity. Alibaba is also integrating AI into its various products and services, such as AI-powered customer service bots on Taobao and logistics optimization within the Cainiao network. The company's productivity tools, like DingTalk and Quark, are also incorporating AI capabilities. Furthermore, Alibaba recently launched its Quark AI glasses, which integrate with Alipay and Taobao, allowing users to use them for translation and price recognition while shopping.
Wu has emphasized that AI is not merely a product to sell but a tool to enhance internal efficiency and reshape industries. He believes that AI's ability to replicate human intellectual and physical labor will drive significant economic and technological shifts. To that end, Alibaba aims to become a leading provider of AI services to global developers. The company is expanding its global presence with new data centers planned in Brazil, France, Japan, the Netherlands, and other locations.
While Wu expresses confidence in AI's potential, Google's Sundar Pichai has cautioned against "elements of irrationality" in the booming sector. Pichai drew parallels to the dotcom era, suggesting that investment cycles can "overshoot," and warned about the immense energy needs of AI and the challenges of meeting net-zero climate targets. He also cautioned that if an AI bubble bursts, no company would be immune, including Google.
Despite Pichai's concerns, Alibaba is moving forward with its AI strategy, aiming to spearhead China's efforts in the global AI race. The company's focus on AI infrastructure and its commitment to developing its own AI models position it as a key player in the evolving AI landscape. This strategy reflects a broader transformation within Alibaba, shifting from a consumer retail focus to a hard-tech infrastructure approach.
