Alibaba’s President Warns of an AI Financial Bubble
The Chinese tech giant has improved its relationship with Xi Jinping’s government, but its executives are raising concerns over investment levels in the U.S.
Alibaba President Joe Tsai expressed concerns on Tuesday about the surge in artificial intelligence (AI) investments in the United States, suggesting that the trend could signal the beginning of a financial bubble.
Speaking at the HSBC Global Investment Conference in Hong Kong, Tsai noted his astonishment at the massive financial commitments, such as the $500 billion Stargate joint venture involving OpenAI, SoftBank Group, and Oracle. He criticized the investment frenzy, pointing out that contracts with customers are not yet secured, which could mean that investment levels are outpacing actual demand.
Gene Munster, Managing Partner and Co-Founder of Deep Water Management, analyzed Tsai’s remarks in a post on X, emphasizing how they sharply contrast with recent projections from U.S. tech giants. These companies have increased their 2025 spending forecasts from 20% to over 40%.
Munster believes these differing narratives may reflect regional contrasts between Chinese and Western markets rather than indicating an overall slowdown in the AI industry. Despite Tsai’s concerns, Munster remains confident that AI infrastructure development will proceed as planned, supporting his prediction of an AI-driven bull market lasting at least two more years.
Alibaba Resumes Hiring
Separately, Tsai announced that Alibaba will resume hiring following a significant meeting with Chinese President Xi Jinping and key figures from China’s tech industry. Tsai described the meeting as a “very, very clear signal” that Beijing is encouraging companies to reinvest and expand their workforce. This marks a shift from the stringent regulatory measures imposed four years ago, which had dampened investment and led to widespread job cuts across the sector.
The meeting, which also included Alibaba co-founder Jack Ma, is being seen as a pivotal moment in warming relations between the Chinese government and the tech industry. Industry insiders view this development optimistically, interpreting it as a green light for renewed growth and expansion.
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