Alibaba Chairman Warns of AI Data Center Bubble
Alibaba Group Holding Ltd. Chairman Joe Tsai warned of a potential bubble in data center construction, arguing that the current pace of buildout may outstrip demand for AI services. Major tech firms and investment funds are aggressively building server farms globally, often without securing clear customers. Tsai expressed concern about projects raising funds without firm uptake agreements. While Alibaba itself plans to invest over $52 billion in AI over the next three years, Tsai highlighted the massive spending by US tech giants (Microsoft, Amazon, Google, Meta) on AI infrastructure, suggesting it might exceed current and projected demand. He pointed to the low-cost, open-source AI model from DeepSeek as an example of the current lack of widespread practical AI applications. Alibaba's response involves leveraging the success of its Qwen-based AI platform and an internal 'reboot' focusing on talent acquisition.