Alibaba Chairman Warns of Potential AI Data Center Bubble

Joe Tsai highlights speculative overbuilding in U.S. AI infrastructure projects, raising concerns about sustainability and demand alignment.

Joe Tsai, Alibaba's chairman, cautioned against speculative investments in AI data centers, warning of a potential bubble forming in the U.S. market.
He criticized projects like the $500 billion Stargate initiative for outpacing current demand and being built without securing customer agreements.
Alibaba itself has pledged $52 billion over three years to AI and cloud computing infrastructure, signaling its commitment to the sector despite Tsai's concerns.
Chinese startup DeepSeek has disrupted the market with low-cost AI models, challenging the sustainability of high-cost infrastructure spending.
Microsoft's reported cancellation of some U.S. data center leases further underscores concerns about potential oversupply in AI infrastructure.