Alibaba Reportedly Revitalized by China’s AI Fever
Interest in artificial intelligence (AI) has reportedly led to a turnaround for China’s Alibaba.
As Bloomberg News reported Wednesday (Feb. 12), the eCommerce conglomerate had virtually slunk into obscurity after a long regulatory crackdown in China. But in recent weeks, the report said, its stock has jumped 46%, expanding its market value by close to $87 billion.
The reason? Enthusiasm for the company’s efforts to create its own AI services and platform, something that gained fuel when Chinese startup DeepSeek released a model that caused a number of American tech stocks to plunge.
Then came a report this week from The Information that Apple had teamed up with Alibaba to launch AI features on its iPhones sold in China.
Apple rolled out its AI features last year after the launch of the iPhone 16. But the company had to delay the introduction of its “Apple Intelligence” in China, due to a government rule requiring Apple to work with local tech developers in building AI models for devices sold there.
“The emergence of DeepSeek has sparked a new AI-related catalyst for Chinese tech stocks,” Andy Wong, investment and ESG director for Asia Pacific at Solomons Group, told Bloomberg.
“Within this space, we see Alibaba as having more tangible and well-established earnings growth prospects in the medium term.”
Bloomberg also notes that Chinese AI companies face a significant hurdle: consumers and businesses in that country have been slower to adopt and less willing to pay for services.
“Many hedge funds and long-only investors see AI as a potential inflection point for Alibaba, with some expressing interest in understanding the valuation of Alibaba’s cloud business and any upside from large language models,” JPMorgan Chase analysts wrote in a note, per Bloomberg.
“The AI narrative is seen as a driver for potential re-rating, but there are concerns about the monetization of AI capabilities.”
In other AI news, PYMNTS wrote Wednesday about new research showing that 82% of workers who use generative artificial intelligence (GenAI) each week believe it can increase productivity.
But as familiarity with GenAI increases, so too do worries about job displacement. The research found that half of workers who use GenAI weekly are concerned that the technology could someday eliminate their job, compared to 24% of those unfamiliar with it.
“As workers gain a better understanding of GenAI’s capabilities, they are becoming more aware of the possible risks to their jobs,” that report said.
“Those who use GenAI weekly are much more likely to believe it can replace aspects of their job compared to those unfamiliar with the technology.”
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