Jack Ma buys Alibaba stock to show support for AI build out

Alibaba Group Holding co-founder Jack Ma has joined its most senior executives in picking up company stock, aiming to reverse a major selloff this week and quell concerns about the Chinese e-commerce leader’s growing spending on AI.

Ma bought more than HK$600 million ($76.5 million) worth of shares in recent days, a person familiar with the matter said, asking not to be identified to discuss a private purchase. He joined Chairman Joe Tsai and Chief Executive Officer Eddie Wu, who together acquired at least $25 million worth of stock.

Ma’s surprise move gave Alibaba’s stock a modest bump Wednesday. It climbed as much as 3.2%, recouping a portion of losses this week after Alibaba raised HK$80 billion in Hong Kong’s biggest follow-on share offering, signalling a determination to amass and spend vast sums to take global AI leadership. The big stock sale spurred concerns about Alibaba’s dwindling profitability as it taps company coffers to finance China’s most aggressive AI infrastructure and services rollout.

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Ma, who helped turn a tiny e-commerce outfit run out of his apartment into one of China’s most powerful tech conglomerates, has in recent years played a more active role at supporting the company. The South China Morning Post reported on Ma’s share purchase earlier.

China’s e-commerce leader this year cemented its status as a global artificial intelligence frontrunner after its flagship Qwen offering became the world’s most popular model family. This week’s fundraising reflected Alibaba’s eagerness to outspend Chinese rivals like Tencent Holdings and ByteDance in the chase to define the frontier of AI development.

The company has sold off assets and pledged to spend more than 380 billion yuan ($56.5 billion) over three years on AI, from chips and data centres to large-language model development.

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But that concentrated effort to challenge Anthropic PBC and OpenAI is already eroding margins, while anaemic domestic consumption dogs its mainstay online retail business. The company amped up its capital spending in the June quarter to nearly $10 billion and said it’s putting the focus on long-term competitiveness.

Last week, Wu stressed that Alibaba’s investments were bearing fruit. The company expects annualised revenue from AI products to near $10 billion this quarter, up from around $7.3 billion in the April to June period. Executives said at the time the company should be able to recoup its overall AI investment within the three-year period.

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