Joe Tsai, the chairman of Chinese e-commerce company Alibaba, on Tuesday, said he was ‘astounded’ by the AI data centre investment figures he was seeing in the US, hinting at an ‘AI Bubble’ while speaking at HSBC Global Investment Summit in Hong Kong. 

Tsai referred to the $500 billion Stargate project, announced by Sam Altman, the CEO of OpenAI and said, “I don’t think that’s entirely necessary, I think in a way people are investing ahead of the demand they’re seeing today. Is that thinking correct or incorrect? You can make a judgement.” 

However, the major red flag for Tsai, as highlighted by him, is the discussions about building data centres based on speculation, without having secured agreements with major companies regarding their usage. He warned, “I’m starting to see the beginning of some kind of bubble.”

Additionally, Tsai noted that Alibaba’s workforce has also significantly declined over the past 12 years. He remarked, “I think we’ve reached the bottom, and we’re going to start to reboot and rehire.”

Despite his concerns, Tsai acknowledged that the broader tech industry remains excited about the latest successes and the future growth of AI. He also highlighted that the Chinese AI start-up DeepSeek has made AI more accessible to the public.