Alibaba shares rise 3% after new AI chip and data center expansion plans

Shares in Alibaba jumped roughly 3% in Hong Kong trading on Tuesday after the Chinese technology giant unveiled a new artificial intelligence chip alongside plans to significantly expand its global data center capacity.

The new chip, referenced in company materials under the Zhenwu series, is part of Alibaba's broader push to strengthen its position in AI infrastructure as demand for computing power used to train and run AI models continues to grow rapidly worldwide.

Alongside the chip announcement, Alibaba outlined plans to sharply increase its data center footprint on a global scale, a move that reflects the intensifying competition among major technology companies to secure the infrastructure needed to support AI services.

Investors responded positively to the announcements, with Alibaba's stock rising on the Hong Kong exchange following the news. The company has increasingly positioned its cloud computing division, Alibaba Cloud, as a central pillar of its long-term growth strategy, competing with other major cloud providers investing heavily in AI capabilities.

The push into custom AI chip development also reflects a wider trend among large technology firms seeking greater control over the hardware underpinning their AI offerings, rather than relying solely on chips from external semiconductor suppliers.

Further details on the specifications of the new chip, the scale of planned data center investment, and the timeline for the expansion were not fully outlined in initial reports. Analysts are likely to watch closely for additional disclosures on capital expenditure as Alibaba moves forward with its AI infrastructure buildout.