r/baba
China Preps $295 Billion Plan to Fund Nationwide AI Buildout
Author is conflicted on China's $295B AI buildout, weighing Alibaba's AI model dominance against state-backed IaaS competition.
- State-led buildout expands the total addressable market for AI infrastructure.
- Alibaba's Qwen models dominate the intelligent layer, which will see a boost as AI requires underlying compute.
- T-Head is on the authorized supplier list for the national buildout.
- Huawei is expected to capture the largest share of the hardware and datacenter market.
- State-backed initiatives could act as a direct competitor to Alibaba Cloud by setting price floors.
I'm a little conflicted with this news, on the one hand, the state is doing the buildout, so in theory you have an larger TAM with SOE full onboard. Alibaba T Head are part of the authorised listed of suppleirs, but Huawei will likely take the largest share.
On the other hand, it sets a price floor because the state obviously wants to make it accessible and affordable for everyone. Or in other words, a competitor to Alibaba cloud.
The only flip side to this coin is that the data center is the raw power or Iaas. The intelligent layer are still dominated by Qwen both open and closed models. So in theory, you have direct competition on the datacenter revenue, but Ai revenue in theory will get a boost because you need to run Ai on something.
Not really sure what to make of this...
Just another day being a bag holder
$$ money has to come from somewhere.
Assuming they can claw back some of the money from the Mainlanders that invested in US and those illicit cash that flow to HK and Singapore. There's still a substantial funding gap.
1) China to reduce healthcare and consumption (i.e. cutback on on stimulus cheques)
That would spending overall, meaning those e-commerce to see less purchase (so JD and BABA Taobao) gets hit. People just go for the cheapest deal (so PDD wins outright, quality is a second consideration)
2) EV sector goes into more vicious "involution" since overall demand will be weak.
Govt pivot to AI and Quantum Computing stuff and that's no longer a priority.
3) Main beneficiary are those infrastructure company. High voltage cabling into data-center, water cooling and heat pipes. Server racks good business so Lenovo (992.HK) goes even higher.
I get that it benefits the semi industries, they dont need more benefiting.
Any views?
I see more opportunities for China mobile and China Telecom just solely based on the bloomberg article.
To be honest, I really have no idea how this will play out
Models like qwen, chat gpt etc seem the least likely to turn a profit and most likely to become commoditized. So if you think (I don’t know) that the qwen model is the way baba makes money here, that’s not good.
China does have a lot of public and private data centers and baba cloud is still the largest and preferred
It’s hard to get a read on this news for me, other than ai is a priority for China and baba is the ai leader in China. Baba is holistic ai in China
Been buying GDS on the dip
Personally this is a call to buy SMIC just trading on fomo
An article back in 2025 stated that baba inked a massive deal to supply china telecom for an upcoming major project. This could be that major project
https://mlq.ai/news/alibaba-signs-major-ai-chip-deal-with-china-unicom/
Tech selloff today, BABA going to 110 USD. Go all in at 75 USD guys.
Waiting for $7.74 to go all in. Hope that Christmas gift comes for generational buy opportunity
Waiting for $1 to go all in
Whattt? You guys still waiting? I'm already all in!
Negative. Cos us will put baba on ban list