Alibaba Group has announced it will significantly increase its investment in cloud and AI infrastructure over the next three years, surpassing the total amount spent in the past decade.  

During the company’s Fiscal Year 2025 Q3 earnings call, CEO Eddie Wu emphasized the importance of scaling up investments as part of Alibaba’s AI strategy.  

“The AI era presents a clear and massive demand for infrastructure. We will aggressively invest in AI infrastructure. Our planned investment in cloud and AI infrastructure over the next three years is set to exceed what we have spent over the past decade,” said Wu.  

Wu also noted that this period would mark the company’s most concentrated and substantial investment in cloud and AI-related infrastructure, acknowledging that hardware investments would impact depreciation.  

Although Alibaba did not disclose an exact figure for its AI and cloud infrastructure spending, Wu mentioned that the investment would be fairly evenly distributed over the three years, with some quarter-to-quarter variations.  

Alibaba’s cloud segment experienced strong growth, with revenue rising 13 percent year-over-year (YoY) to $4.349 billion. AI-related product revenue achieved triple-digit growth for the sixth consecutive quarter, a notable increase from the previous quarter’s seven percent YoY revenue growth.  

Cloud-adjusted EBITDA grew by 33 percent YoY, which CFO Toby Xu attributed to a shift toward higher-margin public cloud products and improved operational efficiency, partially offset by increased investment in customer growth and technology.  

Regarding AI demand, Wu highlighted that since the Chinese New Year, 60-70 percent of new demand has been for inference workloads. “We expect that with this rapid expansion in demand [for inference], we will grow our customer base and expand industry coverage across a wider range of sectors, and all of that will certainly contribute to higher levels of margin in our AI services,” he said.  

Wu had previously predicted this shift toward inferencing, noting in the last earnings call that while current demand was focused on model training, fewer companies would be involved in training as demand moved toward inferencing.  

Alibaba has also expanded its global data center footprint, recently launching its first cloud region in Mexico and a second data center in Thailand. These expansions were initially announced in May 2024, alongside plans for additional data centers in Malaysia, the Philippines, and South Korea.  

Alibaba currently has limited coverage in Africa, via a cloud service in three data centers – two in BCX and Teraco, in South Africa, and a BCX facility in Mozambique.