Alibaba, Tencent signal AI spending surge despite earnings pressure as China chips ramp up

SCMP Tech / 5/14/2026

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Alibaba and Tencent are signaling a sharp increase in AI-related spending even as they face earnings pressure and weaker-than-expected revenue performance.
The companies expect a new wave of China-made chips—enabled by homegrown silicon from players like Huawei and Alibaba’s own labs—to ease supply constraints that have limited their AI ambitions.
Alibaba’s CEO said the firm is likely to “overshoot” its original capex target of $56 billion over three years, reflecting faster infrastructure buildout.
The article frames the move as a strategic bet that improved compute availability will allow both firms to scale AI efforts despite near-term financial tradeoffs.

Alibaba Group Holding and Tencent Holdings are doubling down on a massive artificial intelligence spending spree, betting that a new wave of Chinese-made chips will break the supply bottlenecks stifling their ambitions. While both Chinese tech giants saw revenues trail expectations this quarter, they pledged an aggressive acceleration in capital expenditure, as home-grown silicon from Huawei Technologies and Alibaba’s in-house labs begins to reach scale. Alibaba was likely to “overshoot” its...

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