Alibaba Group Holding Ltd. (NYSE:BABA) is cashing in on the AI boom, raising prices for its computing chips and cloud storage services by as much as 34% as surging demand gives tech giants fresh pricing power in a race to monetize massive AI investments.
Price Hikes Across AI Portfolio
The company said it is increasing prices for its T-Head AI computing chips by between 5% and 34%. It is also lifting prices for its Cloud Parallel File Storage service by 30%.
The updated pricing applies to products including the Zhenwu 810E chip, Bloomberg reported Wednesday. The move underscores Alibaba’s effort to convert heavy AI investment into near-term revenue ahead of its upcoming earnings report.
The pricing changes follow an internal restructuring announced earlier this month, aimed at making AI a more significant profit driver.
Competition Intensifies Across AI Market
Rivals in China and the U.S. are also raising prices as they seek stronger returns on large AI spending, according to Bloomberg. Baidu Inc. (NASDAQ:BIDU) expects to increase prices for some AI cloud products by up to 30% starting next month.
Alibaba is set to report earnings Thursday and continues to position AI chips as a core growth pillar. CEO Eddie Wu has said the company plans to invest more than $53 billion in infrastructure and AI development, with the potential for further expansion.
Bloomberg noted Alibaba has been active in open-source large language models but has struggled to translate that into a clear commercial advantage. The company also lost a key model developer this month and has launched a Token Hub unit to consolidate its AI efforts.
Meanwhile, Nvidia Corp. (NASDAQ:NVDA) CEO Jensen Huang said Wednesday that the company is ramping production of H200 accelerators for China, highlighting strong demand for AI compute.
BABA Price Action: Alibaba shares were up 2.93% at $140.57 during premarket trading on Wednesday, according to Benzinga Pro data.
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