TMTPOST --   The American depository receipts ( ADRs ) of Alibaba Group surged as much   as 10.5% and finished 8.2% higher.   Shares hit   their highest   close since October   2021   after Alibaba leadership showed their   ambitious   artificial   intelligence ( AI )   bets.

Credit：Alibaba

Alibaba   would increase spending   on AI and cloud infrastructure   beyond   the RMB380 billion   ( $53 billion )   it had committed   in   February,   to be   deployed over   the next three years,   said the   CEO Eddie Wu at the annual Apsara Conference in Hangzhou   on Wednesday. Wu   stopped short   of   the new spending target, while emphasizing   that growing demand for AI services and the rapid evolution of the technology warranted a more aggressive approach.  

"The AI industry has developed much faster than we expected, and the industry ’ s demand for AI infrastructure has also far exceeded our anticipations," Wu said.   "We are actively proceeding with the 380 billion ( yuan ) investment in AI infrastructure, and plan to add more."

Wu   suggested   the investment in Alibaba ’ s cloud   computing   power   will boost exponentially.He   disclosed   a   target that the   annual energy consumption of global   datacenters under Alibaba   Cloud   in   2032   will   be   10 times as large   as   the consumption   in 2022.  

Wu said global spending on AI computing capacity is likely to reach $4 trillion within five years, with consolidation leaving only "five or six"   super cloud computing platforms worldwide. By pointing to Qwen — Alibaba ’ s open-source large language model that has become the most widely adopted globally — Wu signaled the company ’ s intention to be among those survivors.   Alibaba Cloud positioned   itself as a "leading full-stack AI services provider",offering everything from raw computing power to advanced models, according to Wu.

During the event, Alibaba announced a parternership with Nvidia   Corporation on physical   AI.   Alibaba Cloud will integrate   Nvidia ’ s   Physical AI software stack, providing enterprise users with a comprehensive platform service encompassing data preprocessing, simulation data generation, model training and evaluation, reinforcement learning for robotics, and simulation testing.   The   With Nvidia ’ s AI development tools,   Alibaba   Cloud ’ s Platform   for   AI   ( PAI )   can   significantly shorten the development cycle for applications such as embodied intelligence and autonomous driving.

Alibaba unveiled upgrades across its AI ecosystem, including its largest and most capable   large language model   ( LLM )   to data, Qwen3-Max. The model is   trained on 1   trillion parametrs and its   instruct version was   said surpasses GPT-5-Chat.   Other launches included the Qwen3-VL vision-language model, improvements to its multimodal Wan and Fun model series, and new tools such as Bailian, a cloud-based studio designed to support AI agent development.

Alibaba Cloud also unveiled plans to   open   its first   data centers in Brazil, France, and the Netherlands in the coming year, and plans to   build   more of the same in Mexico, South Korea, Japan, Malaysia, and Dubai for next year.   It   will also set up new regional service centers in Indonesia and Germany to support customers in those areas.

Wall Street analysts   saw   Alibaba   can keep   the stock rally   from   its AI   boost.CFRA   analyst   Angelo Zino reiterated   a buy call for Alibaba ’ s U.S. stock   in a note Wednesday. Alibaba's AI spending could restrain free-cash-flow, but "we think it will help further accelerate cloud and total revenue growth,"   Zino wrote.

"Additional demand is emerging from the education and healthcare sectors, as well as from companies developing tools that leverage Alibaba ’ s open-source model for artificial intelligence training," Morningstar analyst Chelsey   Tam wrote in a note. "We believe the shares are undervalued, as the market has yet to fully reflect Alibaba ’ s AI cloud potential and the current management ’ s ability to enhance competitiveness."