Cai Chongxin expressed concern when people started building Datacenters without a clear need. "The numbers regarding AI investment in the USA still shock me. People are literally talking about 500 billion dollars, hundreds of billions of dollars. I believe this is completely unnecessary." "People's investments are ahead of the demand seen today, but they predict the demand will be much larger."
$Alibaba (BABA.US)$Group Chairman Cai Chongxin warned that the construction of AI Datacenters by USA vendors may be forming a bubble, and the scale of AI investments by Global technology giants amounting to hundreds of billions of dollars is concerning.
On the 25th, Alibaba Group Chairman Cai Chongxin stated at the HSBC Global Investment Summit held in Hong Kong that large technology companies, investment Funds, and Other Institutions are competing to establish AI training Server bases, and this trend is starting to appear somewhat blind. Many projects lack clear customers during construction.
"I am beginning to see the seeds of some kind of bubble," Cai Chongxin told the representatives at the meeting. He also added that some planned projects have started raising funds without having secured 'demand' agreements.
"When people start building Datacenters without clear demand, I begin to feel concerned. Many people are emerging, and Funds are being established to raise billions or even millions of dollars."
Cai Chongxin: The investment scale by USA vendors is disconnected from actual demand.
Alibaba is strongly recovering in 2025, partly due to the popularity of its Qwen large model, and the company hopes this platform will drive Alibaba's core e-commerce Business and Cloud Computing Service development.
Technology companies on both sides of The Pacific are spending billions of dollars purchasing$NVIDIA (NVDA.US)$SK Hynix chips, which are crucial for the development of AI. Alibaba itself announced in February that it would invest more than 380 billion yuan (approximately 52 billion USD) in AI over the next three years.
In the USA, Trump is promoting a project named "Star Gate," which is expected to invest 500 billion USD.
Cai Chongxin is critical of the spending by American competitors:
"The figures regarding investment in AI in the USA still shock me. People are literally talking about 500 billion USD, several hundred billion. I think this is completely unnecessary.
To some extent, their investments are ahead of the demand seen today, but they predict the demand will be much larger."
The "AI burn money race" among global technology giants.
Only in 2025,$Amazon (AMZN.US)$、$Alphabet-A (GOOGL.US)$and $Meta Platforms (META.US)$ , commitments to invest in AI infrastructure will reach $100 billion, $75 billion, and up to $65 billion.
However, in February, Analysts from TD Cowen pointed out,$Microsoft (MSFT.US)$Some leases for capacity at USA datacenters have already been canceled, raising concerns about whether Microsoft has acquired more AI computing power than its actual needs over the long term.
Microsoft executives downplayed these concerns, stating that the company is currently spending more than at any point in its history, primarily on chips and datacenters. The company expects to spend 80 billion USD on AI datacenters in this fiscal year, but the growth rate of this spending should begin to slow down starting from the new fiscal year that began in July.
At the same time, the low-cost open-source model released by AI DeepSeek in China at the beginning of the year has raised doubts on Wall Street regarding the rationality of large-scale investments. Critics also pointed out that the application of AI in the practical, real world remains persistently lacking.
Affected by this news, today, AI computing concept stocks in the A-share market sharply fell, while most tech stocks in Hong Kong declined, with Alibaba dropping over 3%.
Meanwhile, the Goldman Sachs analyst team downgraded the computing power for the training end and the shipment volume of AI training servers, but remains optimistic about the prospects for AI inference computing power. The expected shipments for 2025 and 2026 have been revised down from 0.031 million units and 66,000 units to 0.019 million units and 57,000 units (based on 144-GPU equivalent calculations). This adjustment is mainly due to the impact of product transition periods and uncertainty in supply and demand.
Editor/Jeffy
Today, after hitting the high near 24,000 in the early session and entering bearish positions, the index fell sharply by nearly over 600 points, immediately recouping yesterday's losses significantly.
Moreover, today it broke the new high again, reaching a maximum of 24,076, but by the end of the market, it fell back by about 70 points, producing a bearish candle. The current trend has not yet been broken, but from the previous low until now, it has risen close to 6,000 points. It is believed that those with positions can continue to hold until there is a clear trend reversal for profit-taking. Those without positions can wait for a pullback to get in. Actually, it is hoped for a quick pullback, as it allows for entry and also provides a healthy breath.
Currently, the outlook remains the same as before. It is believed that even if there is a pullback, it shouldn't be too deep. However, if Futures fail to stabilize and close below 22,350, there may still be room for decline. The chance of Futures falling below 21,400 in the short term should be low, so it is considered that if a significant pullback occurs, it presents a good opportunity to incrementally go long. Recently, there has been a consistent approach to not hold positions overnight, only focusing on immediate trades, as there is no high chasing and no casual short selling.
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