Alibaba Group is planning to spend more money on building out cloud and AI infrastructure over the next three years than it has in the past decade.

Speaking during the company's Fiscal Year 2025 Q3 earnings call, CEO Eddie Wu noted that the company was planning to scale up its investments as part of its AI strategy.

"The AI era presents a clear and massive demand for infrastructure. We will aggressively invest in AI infrastructure. Our planned investment in cloud and AI infrastructure over the next three years is set to exceed what we have spent over the past decade," said Wu.

He later added that he expects this to be the "single period in which we'll be making the most concentrated and highest level of investments in building out our cloud and AI-related infrastructure," while noting that hardware infrastructure will have an impact in terms of depreciation.

An exact number for AI and cloud infrastructure capex was not shared, but Wu told analysts that they expect it to be fairly equally split between the three years, with some fluctuation on a quarter-by-quarter basis.

Update - Alibaba has since said that the company will invest at least 380 billion yuan ($52.4 billion) in cloud and AI infrastructure in the next three years.

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The Chinese company's cloud segment saw a strong quarter, with revenue growth of 13 percent year-over-year (YoY) to $4.349 billion, while AI-related product revenue achieved triple-digit growth for the sixth consecutive quarter. For comparison, the previous quarter saw revenue growth of seven percent YoY.

Cloud-adjusted EBITDA increased by 33 percent YoY, which Alibaba's CFO Toby Xu put down to a shift in "product mix to higher-margin public cloud products and improving operating efficiency, partly offset by the increasing investments in customer growth and technology."

On the demand for AI technology, Wu added that since the Chinese New Year, the company has seen that around 60-70 percent of new demand is for inference workloads. "We expect that with this rapid expansion in demand [for inference], we will grow our customer base and expand industry coverage across a wider range of sectors and all of that will certainly contribute to higher levels of margin in our AI services," he said.

This shift towards inferencing was predicted by Wu during the previous quarter's earnings call, in which he noted that currently, they were seeing demand for training but expected this to move to inferencing with a "smaller number of companies that are actually doing model training."

This month has already seen Alibaba expand its data center footprint globally, launching its first cloud region in Mexico, in addition to a second data center in Thailand. Plans for both of those expansions were first shared in May 2024, along with a commitment to add more data centers in Malaysia, the Philippines, and South Korea.

In September 2024, there was a fire at a Digital Realty data center in Singapore which was used by Alibaba Cloud for availability zone C of its Singapore region. The fire was contained, and Alibaba restored some of the hardware damaged which included "carefully drying" servers.