This will be China's largest-ever computing project financed by a single private business, a move that will further deepen Beijing's AI race against the USA.

In a conference call with analysts last week, CEO Eddie Wu Yongming said the company plans to “aggressively invest” in AI and cloud computing infrastructure over the next three years, reported South China Morning Post.

"Alibaba will spare no effort to accelerate the construction of cloud and AI hardware infrastructure to promote the development of the whole industry," the CEO was quoted as saying by Xinhua.

China's AI market witnessed a major boost this year with the launch of DeepSeek's chatbot model which gained popularity and created ripples in the US IT industry.

Speaking on Alibaba's announcement,  Everbright Securities International strategist Kenny Ng told South China Morning Post: "It is expected that after Alibaba’s announcement, other companies will also plan their capital investment."

“After all, in the initial stage of artificial intelligence development, there are first-mover advantages," he said.

DeepSeek adaptation in China

Several Chinese cities have begun incorporating DeepSeek into their activities to streamline repetitive tasks and hospitals leveraging it for preliminary patient diagnostics, media reports said.

DeepSeek promptly offers advantages such as rapid responses, provision of relevant data pools, and strong support for analysis, and facilitates social workers to quickly grasp the basic outline and overview unfamiliar fields, Liu Wei, director of the Human-Machine Interaction and Cognitive Engineering Laboratory at Beijing University of Posts and Telecommunications, told the Global Times.

Several hospitals in China have adopted it for clinical applications.

The Second Affiliated Hospital of Fujian Medical University incorporated DeepSeek within its electronic medical record (EMR) system for inpatients on Friday, providing diagnostic and treatment support reported the Global Times.

What is DeepSeek?

Based in  Hangzhou, DeepSeek captured worldwide attention after the launch of its chatbot that promises to work equally efficiently like its US counterparts.

However, the chatbots created by the Chinese firm drew attention since it was claimed to be designed at a fraction of the cost and with far less computing power.