Alibaba Rises After Announcing AI Price Hike

TradingKey - Alibaba (BABA) Cloud announced on its official website that it will increase prices for certain AI computing and storage products starting April 18, citing a surge in global AI demand and rising supply chain costs. The company said price adjustments will range up to 34%, with its self-developed computing cards — including the 'Zhenwu 810E' — climbing between 5% and 34%, and the intelligent computing version of its CPFS file storage service rising 30%.  

The latest price change stems from “dual pressures” on both the demand and supply sides. On the demand side, Alibaba Cloud’s Model-as-a-Service (MaaS) platform 'Bailian' saw a record surge in token calls during the first quarter, as enterprises sharply increased inference requests for its 'Tongyi' large language model. This spike has fueled soaring consumption of computing and storage resources.  

On the supply side, prices of high-bandwidth memory chips and key components for AI servers have continued to climb, squeezing cloud service margins. Alibaba Cloud said the adjustment is necessary to pass through part of the cost pressure to end users.  

Alibaba’s T‑Head “Zhenwu 810E” chip has already been deployed in several 10,000‑card clusters, serving more than 400 clients across sectors including energy, power grids, scientific research, and automotive. The chip constitutes a key part of Alibaba’s full‑stack ecosystem, which integrates the “Tongyi” large model, Alibaba Cloud infrastructure, and its in‑house semiconductor capabilities.

Following the announcement, Alibaba Group’s Hong Kong-listed shares rose 2.3% during Monday trading, while its U.S.-listed stock gained nearly 3% in premarket trading.