Billionaire Jack Ma bought $76 million worth of Alibaba stock. He supports the company's efforts in the AI sector.

Alibaba Group co-founder Jack Ma has recently purchased shares in the company to demonstrate his support for its ambitions in the field of artificial intelligence, Bloomberg reports, citing a source. The South China Morning Post had previously reported on Jack Ma’s share purchase.

Ma's purchases came amid a decline in the company's stock price. In Hong Kong, the stock lost nearly 11% over two trading days, August 21 and 24, before rising 1.5% on August 25. The company’s shares lost 9% of their value during trading in the U.S. over those same two days, and on Tuesday fluctuated between a 0.8% gain and a 1% loss.

Jack Ma has purchased shares worth more than 600 million Hong Kong dollars ($76.5 million) in recent days, a Bloomberg source reported. Ma has thus joined Chairman Joe Tsai and CEO Eddie Wu, who had previously purchased shares worth at least $20 million, the agency reports, citing stock exchange filings.

Ma has been playing a more active role in supporting the company in recent years, Bloomberg notes. This week, Alibaba announced that it had raised 80 billion Hong Kong dollars ($10.2 billion) in Hong Kong’s largest-ever secondary offering. This underscores the company’s willingness to accumulate and spend vast sums to secure leadership in global artificial intelligence, the agency notes. The fundraising also reflects Alibaba’s ambition to outpace its Chinese competitors in terms of both spending and speed in the race for AI leadership, the agency noted.

The company is selling off non-core assets and plans to spend more than 380 billion yuan ($56.5 billion) on AI over the next three years—from chips and data centers to the development of large language models, according to Bloomberg.

However, these large-scale efforts to compete are eroding Alibaba’s profitability, while weak domestic demand is holding back its core online retail business. In its report for the quarter ended June 30, the company reported an increase in capital expenditures to nearly $10 billion and stated that it is focused on long-term competitiveness.

On August 24, Freedom Broker reaffirmed its “Buy” rating on Alibaba shares in New York and raised its price target from $170 to $200. This implies growth potential of approximately 67% from current levels. Analysts believe that the acceleration of the cloud business and the monetization of artificial intelligence are the main long-term sources of growth for the company, which is transforming from an online retailer into an AI platform.

On the other hand, legendary short seller Michael Burry—who served as the inspiration for the protagonist in the movie *The Big Short*— stated on August 23 that he had sold his shares in the Chinese e-commerce giant Alibaba “not too long ago.” Burry took a negative view of Alibaba’s decision to issue new shares. Furthermore, in his opinion, Alibaba’s stock is currently too expensive and would have to fall by half for him to become interested again.

Analysts who track Alibaba's stock generally recommend buying it: they have 45 "Buy" and "Overweight" ratings, compared with just two "Hold" and one "Sell" ratings, according to MarketWatch.

This article was AI-translated and verified by a human editor