Alibaba Group Holding Limited (BABA  ) stock rose Tuesday as investors weighed the company's new AI chip and aggressive cloud infrastructure expansion plans. At Alibaba Cloud's Apsara Conference, the company introduced the Zhenwu V900, which it describes as China's most powerful AI chip.

The company said the V900 delivers three times the computing power of its current M890 chip and can scale to clusters of as many as 500,000 chips. The company expects production to begin in the first quarter of 2027.

No international benchmark is available for the V900. CNBC noted that technology analysts in China have compared Alibaba's existing M890 with NVIDIA Corp.'s (NVDA  ) H200.

Alibaba Targets 20 Gigawatts Of Data Center Capacity

Alibaba plans to expand its global data center capacity to more than 20 gigawatts by 2032 as it responds to rising AI demand.

The company has committed $53 billion over three years to its broader AI expansion.

Alibaba also previewed new AI models that it says will be more powerful and use between 5 trillion and 10 trillion parameters.

Tencent Steps Up China's AI Competition

Tencent Holding Ltd. (TCEHY  ) is also increasing its AI efforts, introducing a new image model that it plans to integrate across its products.

Yoon said Tencent hopes the technology will allow AI to perform a wider range of tasks within its WeChat platform, drawing comparisons with Meta Platforms Inc.'s (META  ) Muse AI.

Chinese technology companies remain largely focused on their domestic market, but Yoon said Alibaba is increasingly emphasizing global ambitions across AI infrastructure and cloud services.

Chinese leaders are also balancing rapid AI development with concerns about safety, political control and potential job disruption as companies including Alibaba and Tencent push to remain competitive.

Alibaba Carries Significant ETF Exposure

Alibaba represents 1.97% of the iShares MSCI Emerging Markets ETF (EEM  ), 2.52% of the Schwab Emerging Markets Equity ETF (SCHE  ) and 2.06% of the Baron Emerging Markets Select ETF (BCEM  ).

Significant inflows or outflows from these funds can translate into buying or selling of Alibaba shares.

Price Action

BABA Stock Price Activity: Alibaba Gr Hldgs shares were up 0.8% at $116.64 at last check on Tuesday, according to Benzinga Pro data.