Chinese e-commerce giant Alibaba (BABA) is making a strategic move to lock in long-term power supply as its AI business grows, setting up a new venture with one of China’s leading nuclear power companies. The company has formed a 250 million yuan ($35.9 million) joint venture with China National Nuclear Power and other partners, according to corporate filings. However, the details on the exact scope of operations have not been disclosed.
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Alibaba has already committed more than $53 billion to AI research and development over the coming years, with a large portion expected to go towards building and expanding data centers. This deal could help the company lock in stable energy as those plans move forward.
Power Is Becoming a Real Constraint
Power supply is becoming a real issue as AI use grows. Large AI data centers need a huge amount of steady electricity, pushing tech companies to look for long-term power solutions.
Globally, companies like Meta Platforms (META) and Microsoft (MSFT) have already signed deals with nuclear power providers to support their data centers.
Governments are also paying closer attention. As AI demand rises, concerns are growing around power supply and electricity prices. In China, government policies have leaned more towards using the country’s world-leading solar and wind buildout to meet computing growth. Meanwhile, in the U.S., the Trump administration has been pushing plans that would have technology companies help pay for new power plants, as AI growth puts more strain on the electricity grid.
Is Alibaba Stock a Buy Now?
Wall Street remains constructive on the stock. Alibaba stock carries a Strong Buy consensus rating based on 14 unanimous Buy ratings over the past three months. The average BABA price target stands at $203.09, suggesting roughly 25.06% upside from current levels.
