Alibaba’s “Second Act”: AI Goes All-In, Jack Ma Reappears, And Big-Name Money Leans Back In

If the years from 2021 to 2023 marked the “winter” for China’s internet giants, 2025 is starting to feel like spring. Investor sentiment toward the sector has warmed, valuations are rebounding, and leadership stories are shifting. Few companies embody that thaw more than Alibaba Group Holdings (NYSE: BABA) (HKEX: 9988).  

In a single week, three powerful signals reshaped the conversation: Jack Ma returned to the spotlight, Alibaba unveiled a sweeping Artificial Intelligence (AI) vision at its Apsara (Yunqi) conference, and Cathie Wood’s ARK Invest bought into the stock for the first time in four years.  

The message was clear: Reports from the Apsara conference highlighted Alibaba’s efforts to reposition itself with a stronger focus on AI and cloud services. 

Key Points 

• Jack Ma’s reappearance and cultural influence have boosted confidence in Alibaba’s renewed ambitions. 
• Alibaba unveiled its Qwen AI models and a $53 billion investment plan, positioning AI as the company’s new operating system. 
• Investor sentiment has turned positive, with ARK Invest and others signalling fresh confidence in Alibaba’s long-term growth story. 

The Return of Jack Ma: More Than Symbolism 

Commentators note that Jack Ma’s presence continues to play a symbolic and cultural role within Alibaba. His presence, whether formal or informal, has a profound impact on employee morale, investor confidence, and even the company’s relationship with policymakers.  

Over the past month, reports of Ma’s visibility on campuses and involvement in strategy sessions have surfaced, and the timing is notable. Alibaba is in the middle of a cultural reset after years of regulatory headwinds and fierce competition.  

In China tech, symbolism is strategy: Observers have linked Ma’s reappearance with a shift in company sentiment, suggesting a potentially more supportive regulatory environment compared to previous years.  

Execution may hinge less on charismatic leadership than on operational rigour, but the reassurance effect is real. Employees, partners, and investors alike are taking notice. 

Apsara 2025: AI as the Operating System 

The real headline, though, came in Hangzhou at Alibaba’s Apsara conference. This year’s theme was not incremental innovation but reinvention. Alibaba pitched AI not as an accessory to its existing business, but as an entirely new operating system for the company. 

The centrepiece was the Qwen3 family of models. Qwen3-Max, a trillion-parameter LLM, targets code generation and autonomous “agent” tasks. Qwen3-Omni adds multimodal capabilities for AR/VR, smart cockpits, and other embodied use cases.  

Crucially, Alibaba isn’t trying to keep these tools locked up. Instead, it framed Qwen as the “Android of the AI era”. In other words, it’s been built to be open, extensible, and designed to cultivate a developer ecosystem. 

That openness is strategic. By pushing Qwen into the hands of as many developers as possible, Alibaba accelerates adoption, builds a lingua franca for enterprise AI, and funnels workloads onto its cloud. It’s the same logic that made Android ubiquitous, and it’s a wedge against competitors like Baidu, Tencent, and ByteDance. 

Backing this up is a staggering three-year capital plan: RMB 380 billion (US$53 billion) committed to AI and cloud infrastructure, with hints that the final figure could run higher ^[1]. This is platform economics at work; when your cloud sells the compute and your models power the apps, every win compounds. 

Physical AI: From Code to Robots 

One of the more intriguing layers of Apsara was Alibaba’s embrace of “Physical AI.” The company announced the integration of Nvidia’s Physical AI software stack into its PAI (Platform for AI). For developers, this offers a one-stop environment for synthetic data, reinforcement learning, and model testing, all within Alibaba Cloud. 

The ambition here is clear: embodied AI. If the next platform shift involves robots, autonomous driving, and simulation-heavy industries, being the default toolchain matters.  

Alibaba has outlined ambitions to provide a platform for industries experimenting with AI applications. That’s a leap from “e-commerce and cloud” to something much bigger, a seat at the table in shaping the physical AI economy. 

The Money Signal: ARK Invest Comes Back 

Analysts noted that ARK Invest’s renewed position in Alibaba coincided with a broader shift in market perception. For the first time since 2021, Cathie Wood’s team disclosed new Alibaba positions; about US$16.3 million spread across two ETFs ^[2]. 

Relative to Alibaba’s US$200 billion+ market cap, the dollar figure is negligible. But in narrative terms, it’s a spark. ARK’s renewed position was disclosed around the same time as Apsara announcements, during which Alibaba shares rose in Hong Kong and New York trading.  

More importantly, it suggests that high-profile growth investors see regulatory risk as having moderated, the AI thesis as compelling, and the risk/reward balance shifting back towards being attractive. 

It also fits a broader pattern: ARK has dipped into Baidu and other Chinese AI names recently. The message is that the AI opportunity in China is now too big to ignore. 

Cloud: The Backbone of the Flywheel 

None of this works without infrastructure. Alibaba Cloud remains China’s leader, with about 35.8% market share as of H1 2025 – comfortably ahead of Huawei, Tencent, and ByteDance ^[3]. Scale is critical in AI because workloads are spiky, capital-intensive, and bandwidth-hungry. 

At Apsara, management outlined a striking goal: by 2032, the energy consumption scale of Alibaba’s global data centers will be 10× what it was in 2022. That isn’t guidance on earnings, but it’s a bold statement of intent: Alibaba plans to be a much larger infrastructure player a decade from now. 

The overseas angle matters as well. Alibaba has been expanding its data-centre footprint internationally, signaling that its AI services won’t be confined to the domestic market. Geopolitical headwinds make this complex but the ambition to serve global developers and enterprises is unmistakable. 

Commerce: Still the Cash Register 

For all the AI headlines, commerce still pays the bills. Alibaba’s latest push is into group-buying and in-store services, launched across Taobao Flash, Alipay, and Amap, with Ele.me as the logistics arm.  

The timing is deliberate: the run-up to Double 11. Competition with Meituan will be fierce, and subsidies will weigh on margins in the short term. But the long game is better ecosystem synergies.  

If Alibaba can turn a subsidised restaurant visit into broader wallet share across e-commerce, payments, and delivery, the flywheel spins faster. Market observers note that volatility may continue, but Alibaba’s focus on commerce remains central even as AI draws more attention. 

Market Response: Sentiment Re-Anchored 

Investors reacted swiftly. Alibaba’s Hong Kong-listed shares reached a four-year high, while US-listed ADRs rose more than 6% mid-week and are reported to be up around 90% year-to-date ^[4]. Past performance is not a reliable indicator of future results. 

The bigger story is not the precise market move but the shift in narrative, with commentators suggesting Alibaba has outlined a clearer growth path than in recent years. 

Looking Ahead: Where Alibaba Goes From Here 

Alibaba’s announcements — including Jack Ma’s return, new Qwen models, and a major AI investment plan — have drawn attention from market commentators. But bold headlines are just the opening act. The real test is whether Alibaba can turn ambition into execution, and, most importantly, actual profits. 

Analysts note that future developments in areas such as AI adoption, enterprise partnerships, global expansion, and financial discipline will be important indicators of Alibaba’s progress.  

Below, we’ve laid out the seven big watchpoints that will tell us whether Alibaba’s AI pivot becomes the growth engine bulls are hoping for. 

Focus Area	Why It Matters	Key Market Factors to Monitor
Developer & Ecosystem Traction	Qwen models need scale, like Android did, to become sticky.	Number of developers, startups adopting Qwen, API usage, retention. Balance of open vs. premium tiers. Competition from DeepSeek, Baidu Ernie, open-source models.
Enterprise & Physical AI Deals	Flashy demos don’t matter unless enterprises sign on.	Big-name customers in auto, manufacturing, healthcare. Robotics pilots, smart-factory rollouts, ROI proof. Vertical-specific models (finance, medical, etc.).
Global Infrastructure Execution	Data centres abroad prove if Alibaba can be more than a China giant.	Delivery of data centres in Brazil, France, Malaysia, etc. Low-latency service, compliance with data rules. Energy, cooling, cost efficiency.
Monetisation & Margins	AI spending only pays off if revenues follow.	Revenue mix from AI vs. commerce/cloud. Pay-per-use vs. subscription. CAPEX ROI timeline. Margin pressure from subsidies in commerce.
Regulation & Political Risk	Policy and geopolitics can reshape the game overnight.	China’s AI governance and data rules. US chip export controls. Tensions affecting overseas expansion.
E-Commerce Synergy & AI Augmentation	Commerce pays the bills, AI can turbocharge it.	AI-generated fashion, improved recommendation engines. Integration of AI across shopping, payments, logistics, local services.
Financial & Execution Discipline	Heavy capex must translate into sustainable returns.	Earnings showing AI contributions vs. expense drag. Balance between AI spending, buybacks, dividends. Retention of top AI talent and R&D velocity.

Where Next For Alibaba’s Resurgence? 

Alibaba has presented a reinvention strategy that emphasises AI, cloud, and cultural renewal, tying together cloud infrastructure, open AI models, embodied AI, and cultural renewal.  

Alibaba’s latest strategy positions the company beyond e-commerce, aiming to play a role in the AI-driven global economy.  

The opportunity is enormous, but so are the challenges. Whether Alibaba’s new strategy will achieve long-term success remains uncertain and depends on execution and market conditions. 

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