AI’s Uncertain Path Forward: Alibaba’s Three-Year Strategy Faces Investor Skepticism

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AI’s Uncertain Path Forward: Alibaba’s Three-Year Strategy Faces Investor Skepticism

Bitget-RWA2025/11/25 21:12

By:Bitget-RWA

- Alibaba CEO Daniel Zhang rejects AI "bubble" fears, predicting sustainable growth for at least three years despite market volatility. - AI sector faces valuation challenges as firms like C3 .ai and Nvidia see sharp stock declines despite strong earnings, with investors shifting to defensive sectors. - Startups like PetVivo AI demonstrate AI's disruptive potential in under-digitized markets, achieving 50–90% cost reductions in veterinary client acquisition via SaaS. - Industry divides persist between Alib

Daniel Zhang, CEO of Alibaba Group Holding Ltd. (BABA), has downplayed fears of an AI "bubble," stating that the industry is set for steady expansion for at least the next three years. His remarks come as AI-related stocks experience heightened volatility, with investors questioning valuations that have surged ahead of many companies' short-term earnings. Zhang's perspective stands in contrast to recent declines in the sector, where

firms such as C3.ai Inc. and Nvidia Corp. have seen significant drops

even after reporting robust financial results.

Concerns about the sustainability of AI company valuations have grown as investors increasingly favor defensive industries like healthcare. For instance,

Nvidia

posted a record-setting $57 billion in revenue for the third quarter, yet

its stock price slipped by 3.15% as investors questioned

whether current market prices accurately represent the sector's long-term business prospects. During the same period, the Nasdaq Composite Index fell by 2.2%, and

Advanced Micro Devices

(AMD) shares dropped almost 8%. Experts point to the lack of agreement on how to assess AI companies' worth, as these firms often command much higher valuations than traditional software businesses.

C3.ai, a company focused solely on AI software, has become a central example of these valuation concerns. The company recently strengthened its collaboration with Microsoft Azure to make enterprise AI adoption easier, but at the same time reported a

19% decrease in revenue year-over-year

along with continued negative cash flow. Leadership changes, including the departure of founder Thomas Siebel as CEO, have added further uncertainty. At the same time, C3.ai's deeper integration with Microsoft Copilot, Fabric, and Azure AI Foundry is intended to streamline AI solutions for large organizations, especially in government and defense sectors

as outlined in the partnership statement

One example, CUDOS Intercloud,

utilizes verified data centers and smart contracts

to deliver affordable GPU resources to developers and researchers. This reflects a broader movement in the industry toward distributed computing, which offers scalability and adaptability while maintaining high performance.

Outside of enterprise AI, startups are carving out unique opportunities. PetVivo AI, Inc. has introduced an AI-powered SaaS platform aimed at the $150 billion pet care industry,

cutting veterinary client acquisition expenses by 50–90%

through automated lead generation and customer engagement. During its beta phase, the platform delivered a median of 47 new clients per practice over six months, with an average acquisition cost of $42.53—significantly less than conventional approaches. PetVivo's achievements underscore AI's ability to revolutionize sectors that have been slow to digitize,

making it a key driver of valuation growth

as it shifts from medical device-based revenues to high-margin SaaS offerings.

Despite these advancements, doubts remain. While Alibaba expresses optimism about AI's future, some analysts continue to urge caution, emphasizing the importance of tangible proof of lasting profitability. As the industry faces ongoing valuation challenges and operational obstacles, the rivalry between established cloud giants and decentralized solutions is expected to influence the next stage of AI evolution

according to industry analysts

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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