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Alibaba Group’s CEO Eddie Wu said the company expects its data center infrastructure requirements in 2033 to be roughly 10 times larger than what it operated in 2022
In sum – what to know:
AI cloud growth – Alibaba Cloud’s AI-related revenue reached CNY8.97 billion in the quarter, marking its eleventh consecutive quarter of triple-digit year-over-year growth.
Massive infrastructure scale-up – CEO Eddie Wu said Alibaba expects to need 10 times more data center infrastructure by 2033 compared to 2022 levels.
Full-stack AI strategy – Alibaba is expanding AI cloud infrastructure, proprietary chips and MaaS offerings as competition intensifies in China’s AI market.
Chinese company Alibaba Cloud is preparing for a significant expansion of its AI infrastructure footprint as demand for AI cloud services and model hosting accelerates across China.
During Alibaba Group’s latest earnings call, CEO Eddie Wu said the company expects its data center infrastructure requirements in 2033 to be roughly 10 times larger than what it operated in 2022, reflecting rapid growth in AI workloads and cloud demand.
“Essentially, I think if you compare where things were in the year 2022 before this explosive growth in AI models and what we expect to need in 2033, I think we’re talking about 10x increase. We need 10x the amount of data center infrastructure compared to what we had in 2022,” Wu said.
Wu added that Alibaba is using a mix of capital expenditure and operating expenditure models to secure compute capacity. “There are different ways to get that compute capacity. Some of it can be capex, part of it can also be opex, and we’re actually now acquiring quite a bit of computing capacity using opex,” he said.
Alibaba’s Cloud Intelligence Group reported revenue of CNY41.6 billion ($6 billion) for the quarter ended March 31, up 38% year over year. Revenue from external customers grew 40% during the period, driven primarily by public cloud services and rising adoption of AI-related offerings.
The company said AI-related product revenue reached CNY8.97 billion during the quarter, marking the eleventh consecutive quarter of triple-digit year-over-year growth.
Alibaba said it continues expanding its portfolio of AI cloud products and services, including high-performance networking, distributed storage, cloud operating systems, and infrastructure for AI model training and inference.
The company is also advancing its Model-as-a-Service (MaaS) strategy through its Model Studio platform, which offers AI models, token-based enterprise solutions, and AI agents aimed at developers and enterprise customers.
According to Alibaba, the customer base for Model Studio increased eight-fold year over year as of March 2026. “Alibaba’s full-stack AI investments have progressed from incubation to commercialization at scale. This quarter, we achieved accelerated breakthroughs across models, cloud infrastructure, and applications,” Wu said.
He added that AI-related products now account for approximately 30% of Alibaba Cloud’s external revenue.
Wu also highlighted Alibaba’s efforts to secure compute supply through proprietary AI chips and internal infrastructure capabilities.
“As the only AI cloud provider in China capable of delivering self-developed AI chips at scale, we’ve secured autonomy over our compute supply chain while providing customers with highly competitive AI inference and training services,” Wu said.
“In an environment of compute scarcity, this structural advantage is favorable to our revenue growth and gross margin improvement,” he added.
Alibaba also noted that 60% of its compute capacity is now serving external customers, while Wu said the company’s GPUs have “achieved scaled mass production.”
In September 2025, a Wall Street Journal report stated that Alibaba Group had developed a new artificial intelligence chip designed to handle a wider range of inference tasks.
The chip, currently undergoing testing, is being manufactured in China, a shift from an earlier generation of Alibaba’s AI processors that were fabricated by Taiwan Semiconductor Manufacturing Company (TSMC), according to the report.
