Alibaba (BABA) Stock Jumps 3% After New AI Chip and Data Center Plans

TLDR

• Alibaba stock jumped around 3% in Hong Kong after unveiling its new Zhenwu V900 AI chip
• The V900 delivers three times the performance of its predecessor, the Zhenwu M890
• Alibaba plans to expand global data center capacity to more than 20 gigawatts by 2032
• The company has committed to spending more than $53 billion over three years on AI
• Alibaba’s next-generation Qwen 4 model is currently in training, with Qwen 4.5 and Qwen 5 planned

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Alibaba stock climbed around 3% in Hong Kong on Tuesday after the company unveiled a new AI chip and major data center expansion plans at its annual Apsara Conference in Hangzhou.

Alibaba Group Holding Limited, BABA

The new chip, called the Zhenwu V900, comes from Alibaba’s T-Head chip division. It triples the performance of its predecessor, the Zhenwu M890, which was released in May.

The V900 can be combined in clusters of up to 500,000 units to support frontier-model training. It is scheduled for mass production and commercial release in the first quarter of 2027.

Alibaba CEO Eddie Wu announced a target of 20 gigawatts of global data center capacity for Alibaba Cloud by 2032. He cited “exponentially rising demand for AI” as the driver behind the push.

*ALIBABA TARGETS 20GW OF DATA CENTER CAPACITY BY 2032
*ALIBABA UNVEILS NEW AI CHIP IT CALLS CHINA’S MOST POWERFUL

Sounds like a whole lot more capex coming for $BABA pic.twitter.com/iptpqpNPAE

— Negligible Capital (@negligible_cap) September 22, 2026

Wu described machine thinking as having an “enormous growth runway,” comparing today’s AI development to the early stages of electrification. He added that “AI coding is simply the light bulb of the machine intelligence era.”

Alibaba has committed to spending more than $53 billion over three years to expand its AI capabilities. In August, it raised about $10.2 billion from a follow-on stock offering in Hong Kong.

The existing Zhenwu chip lineup already has more than 650 customers across automotive, finance, energy and manufacturing sectors.

Model Development Also in Focus

Alongside the chip news, Alibaba said its next-generation Qwen 4 model is currently in training. The company also outlined plans for future Qwen 4.5 and Qwen 5 model series.

Alibaba also plans to develop a model with between 5 and 10 trillion parameters, far larger than what is common today. That model would be designed to handle longer and more complex tasks.

The company also plans to list its T-Head chip design unit separately to tap into investor interest in the AI accelerator market.

Competition Heating Up

Alibaba’s domestic rival Huawei unveiled new AI infrastructure last week that it says can scale to as many as one million processors.

Nvidia earlier this month outlined plans to support up to 2 gigawatts of AI infrastructure in Australia by 2027. Meta in July announced a 1-gigawatt data center in Alberta, Canada, expected to cost around $9 billion.

Alibaba’s announcements came as global AI stocks rallied on early signs of success for Meta’s new personal agent, which helped lift investor sentiment.

The Apsara Conference also took place on the eve of a summit between US President Donald Trump and Chinese President Xi Jinping. Top executives including Nvidia’s Jensen Huang and Microsoft’s Satya Nadella are set to attend a White House state dinner tied to the meeting.

AI topics are expected to feature prominently in those discussions.