Alibaba CEO Eddie Wu has emphatically dismissed concerns about an artificial intelligence bubble, stating the company “doesn’t really see much of an issue in terms of a so-called AI bubble” and plans to invest “aggressively” despite warnings from Google’s Sundar Pichai about “elements of irrationality” in the booming sector.Wu told investors that Alibaba can’t keep pace with surging customer demand, and predicted AI resources will remain in short supply for the next three years. The Chinese tech giant’s confidence appears backed by concrete results: its Qwen app exceeded 10 million downloads within a week of launching.“We’re not even able to keep pace with the growth in customer demand,” Wu said, arguing that adoption is driven by real business needs across manufacturing and product development rather than speculation.

Google CEO warns no company will escape impact

Pichai cautioned that if an AI bubble bursts, no company would be immune, including Google itself. Drawing parallels to the dotcom era, he acknowledged that investment cycles can “overshoot” and predicted AI would follow the same pattern.The Google chief’s concerns center on whether massive infrastructure spending can deliver returns quickly enough to justify current valuations. He warned about AI’s “immense” energy needs, which accounted for 1.5% of global electricity consumption last year, and admitted the company faces challenges meeting its 2030 net-zero climate targets.The debate has intensified as analysts point to approximately $1.4 trillion in deals involving OpenAI, despite the company expecting revenues this year of less than one-thousandth of planned investment. Some fear a repeat of the late 1990s dotcom crash, when collapsing valuations triggered job losses and damaged pension funds.

Alibaba doubles down despite profit squeeze

Alibaba posted $34.8 billion in revenue for its September quarter, up 5% year-over-year, though net income plummeted 53% due to heavy AI and commerce spending. The company’s cloud division led growth with a 34% increase driven by AI-related products.Wu suggested the company’s previously announced 380 billion yuan AI investment over three years “might be on the small side”. His bullish stance notably contradicts Alibaba Chairman Joe Tsai, who warned in March about seeing “the beginning of some kind of bubble” in the rush to build data centers.The split between optimists like Wu and skeptics like Pichai reflects broader uncertainty across Silicon Valley, where Big Tech firms are expected to spend $320 billion on AI infrastructure this year while grappling with questions about when—and whether—the investments will pay off.