Alibaba Group Chairman Joe Tsai announced on Tuesday that the tech giant will resume hiring, fueled by increased confidence following a significant meeting between President Xi Jinping and major Chinese tech entrepreneurs in February. Tsai also expressed concerns about large-scale artificial intelligence (AI) investments in the U.S., suggesting they might signal the start of a bubble.
Tsai praised the rare meeting, which included Alibaba co-founder Jack Ma, marking a shift in Beijing’s approach to the tech sector. A regulatory crackdown on the industry several years ago had slowed growth, reduced investment, and led to layoffs. Tsai believes the meeting sent a clear message to the business community: it was time to reinvest and rehire employees.
After a decline in Alibaba’s workforce over the past 12 quarters, Tsai is optimistic that the company has hit rock bottom and plans to start rebuilding. China’s economy has faced several challenges, including slow growth and a real estate debt crisis, leading to job insecurity and weak consumer sentiment. However, Tsai emphasized that hiring would lead to greater job security and income growth, boosting business and consumer confidence.
Tsai also highlighted the success of DeepSeek, a Chinese startup disrupting the AI sector with affordable models, which has helped restore confidence in China’s tech industry. This success, alongside Alibaba’s significant investments in AI, will likely drive the need for more hiring in the sector.
While Alibaba is investing heavily in AI, Tsai expressed concern about the massive investments happening in the U.S. He referred to large investment figures, such as $500 billion, as unnecessary, suggesting that investments are being made ahead of actual demand. Tsai specifically voiced worries about speculative data center construction, seeing signs of a potential bubble in the U.S. market.
In comparison, Alibaba plans to invest 380 billion yuan ($52 billion) in its cloud computing and AI infrastructure over the next three years. The positive sentiment around China’s tech sector, boosted by Xi’s meeting and the success of companies like DeepSeek, has contributed to a 24% rise in Hong Kong’s Hang Seng Tech Index this year.