Alibaba Group (BABA) launched its next-generation AI video model, Wan3.0, on September 5, 2023, the day after completing an HK$80 billion (approximately $10.2 billion) share placement in Hong Kong— the largest primary follow-on offering by a Hong Kong-listed company. Wan3.0, capable of generating videos up to 30 seconds long from various inputs, is designed to enhance short-film production, advertising, and tourism marketing. Pricing on the Alibaba Cloud Model Studio for API usage starts at $0.05 per second for 480p quality.
Following the announcement, Alibaba’s shares dropped 8.1% to HK$113, amidst concerns over the dilution from the share sale, which involved 710 million new shares priced at an 8.4% discount. The funds raised are intended to bolster Alibaba’s AI capabilities across its business spectrum, including chips and infrastructure development. In fiscal Q1 2027, Alibaba reported revenues of RMB268.95 billion ($39.64 billion), up 9% year over year, while AI-related revenues reached RMB12.4 billion, marking its 12th consecutive quarter of triple-digit growth.
Alibaba has committed to investing over RMB380 billion in AI and cloud infrastructure over the next three years, aiming for substantial growth in its cloud business. In similar developments, tech giants like Alphabet (GOOGL) and Microsoft (MSFT) are also heavily investing in AI infrastructure tied to generative video and cloud services.
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