Alibaba Stock Pops 6% In Hong Kong As Homegrown AI Chips Rival Nvidia's H20, $3.2 Billion Bond Raise Fuels Rally

Benzinga
2025.09.12 03:10
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Alibaba's stock rose 6.35% to HK$152.40, driven by a $3.2 billion bond raise and a $53 billion investment in AI. The company is using its own chips to train AI models, reducing reliance on Nvidia. Alibaba Cloud leads the market with a 33% share, as China's cloud spending grows. The stock has gained 83.95% year-to-date, reflecting strong investor confidence in its AI strategy and growth momentum.

Alibaba Group Holding Limited BABA BABAF jumped 6.35% to HK$152.40 ($19.58) on the Hong Kong Exchange on Thursday morning, extending its remarkable 83.95% year-to-date gains as investors reacted positively to the Chinese e-commerce giant’s aggressive artificial intelligence expansion strategy and $3.2 billion fundraising.

$53 Billion AI Investment Fuels Growth Momentum

The surge follows Alibaba’s announcement of a 380 billion yuan ($53 billion) three-year investment commitment in artificial intelligence and related technologies. The company’s Cloud Intelligence Group has already shown strong results, posting 26% revenue growth to $4.66 billion in the latest quarter.

Alibaba recently raised $3.2 billion through zero-coupon convertible bonds, with nearly 80% of proceeds earmarked for data center expansion and technology upgrades. The senior note, maturing September 15, 2032, converts into U.S.-listed shares.

Chinese Tech Giants Push Chip Independence

The rally gains momentum from reports that Alibaba has begun using internally designed chips to train AI models, reducing reliance on Nvidia Corp. NVDA processors. According to The Information reported via Reuters, Alibaba has deployed its own chips for smaller AI models since early 2025, while competitor Baidu experiments with its Kunlun P800 chip for Ernie AI development.

Alibaba’s AI chip is now good enough to compete with Nvidia’s H20, The Information reported, citing three employees familiar with the technology. This shift represents a significant development in China’s AI landscape, where companies have traditionally depended on Nvidia’s processors.

Cloud Market Leadership Strengthens Position

China’s cloud infrastructure spending surged 16% year-over-year to $11.6 billion in first quarter of 2025, with Canalys projecting market growth from $40 billion in 2024 to $46 billion in 2025. Alibaba Cloud maintains its dominant 33% market share, ahead of Huawei Cloud‘s 18% and Tencent Holdings Ltd. TCEHY Cloud’s 10%.

Benzinga’s Edge Stock Rankings show BABA maintaining a steady upward trend across short-, medium-, and long-term horizons, with further performance insights available here.

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