Alibaba's chairman warns of potential AI investment bubble

Experts are raising alarms about a potential bubble in the artificial intelligence (AI) industry. Alibaba's chairman, Joe Tsai, has recently voiced concerns over massive investments in AI data centers that may not have enough customers to justify their costs. This could lead to a troubling imbalance between supply and demand. Despite committing to over $52 billion for AI development in the next three years, Tsai points out that many data centers are being built without clear market needs. His comments follow a recent sell-off in tech stocks, triggered by the success of a low-cost AI developed by a Chinese startup, DeepSeek. Major players in the tech industry continue to invest heavily in AI infrastructure. President Donald Trump's $500 billion project, named Stargate, is set to create one of the largest AI computing clusters in Texas. Meanwhile, companies like Amazon and Meta are also making significant investments, raising questions about the long-term sustainability of such spending. Tsai believes the current momentum could be misplaced as companies rush to invest beyond actual demand. He warns that the large amounts being discussed in the industry may not be necessary and suggests a cautious approach in future spending.