Alibaba Group Chairman Joe Tsai announced on Tuesday that the tech giant would begin hiring again after a prolonged period of downsizing, citing a renewed sense of confidence following a key meeting between Chinese President Xi Jinping and top business leaders, including Alibaba’s co-founder Jack Ma.
Tsai highlighted that the rare February meeting, which marked a shift in Beijing’s regulatory stance toward the tech sector, had provided a clear signal for companies to reinvest and expand. Alibaba’s headcount has been shrinking for 12 consecutive quarters, but Tsai believes the worst is over, and the company is now poised to restart its hiring efforts.
“Once you hire people, that gives people job security and income growth, which translates into business confidence and, eventually, consumer confidence,” Tsai said, emphasizing the positive impact that job creation could have on China’s struggling economy.
Despite the encouraging signs in China, Tsai expressed concern about the massive AI investment boom in the U.S., which he fears could signal the beginning of an unsustainable bubble. He criticized the scale of investments in AI, with figures in the hundreds of billions of dollars being thrown around, noting that such investments might be ahead of the actual demand for AI technologies. Tsai also voiced concerns about speculative data center builds in the U.S., warning that this could contribute to market excesses.
In contrast, Alibaba plans to invest 380 billion yuan (about $52 billion) in its cloud computing and AI infrastructure over the next three years. This investment is intended to strengthen the company’s capabilities in artificial intelligence, aligning with its long-term strategic goals.
Alibaba’s cautious approach stands in stark contrast to the broader market excitement surrounding AI, driven partly by the success of Chinese startup DeepSeek, which has gained attention with its affordable AI models and open-source initiatives. Tsai’s comments come amid broader optimism in China’s tech sector, fueled by President Xi’s positive gestures toward the industry and DeepSeek’s rising influence.
Hong Kong’s Hang Seng Tech Index, which includes Alibaba, has seen a 24% increase this year, driven by both the regulatory thaw in China and the rapid development of AI technologies.
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