Two 59%+ winners, four above 25% in Aug – How this AI model keeps picking winners
Investing.com -- On Tuesday, Joe Tsai, Chairman of Alibaba (NYSE:BABA) Group, voiced his concerns regarding the surge in artificial intelligence (AI) investment in the United States, suggesting it might signal the onset of an investment bubble. Speaking at the HSBC Global Investment Conference in Hong Kong, Tsai conveyed his astonishment at the massive financial commitments, such as the $500 billion Stargate joint venture involving OpenAI, SoftBank (TYO:9984) Group, and Oracle (NYSE:ORCL).
Tsai criticized the current trend where companies are aggressively building data centers for AI without having secured customer agreements, a practice involving investment that exceeds current demand levels. He highlighted instances of data center firms constructing new facilities speculatively, indicating a potential misalignment between investment and actual market needs.
Gene Munster, Managing Partner and Co-Founder of Deep Water Management, offered some analysis in a post on X, noting that Tsai’s words contrast sharply with recent forecasts from US tech giants who increased their 2025 spending projections from 20% to over 40%.
Munster believes these competing narratives may reflect regional differences between Chinese and Western markets rather than signaling an industry-wide slowdown. Despite these concerns, Munster maintains his conviction that the AI infrastructure buildout will continue as planned, supporting his prediction of an AI-powered bull market lasting at least two more years.
In other news: a positive note for Alibaba’s future growth, as Tsai announced that the company is set to resume hiring. This decision follows a significant meeting with Chinese President Xi Jinping and prominent figures in the Chinese tech industry. Tsai praised the meeting as a "very, very clear signal" that Beijing is encouraging businesses to reinvest and expand their workforce, marking a departure from the strict regulatory measures imposed four years ago which had dampened investment and led to job cuts across the sector.
The conference with Xi Jinping, which also included Alibaba co-founder Jack Ma, is seen as a pivotal moment that signifies a warming of relations between the Chinese government and the tech industry. After years of a regulatory crackdown that stifled corporate expansion, Tsai’s announcement of Alibaba’s hiring plans reflects a newfound optimism and a green light for the industry to pursue growth and development.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.