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Alibaba Unveils Zhenwu V900 AI Chip, Pledges US$53.00 Billion Cloud Buildout
Alibaba has unveiled its Zhenwu V900 AI accelerator, described as China's most powerful AI chip, alongside a commitment of more than US$53.00 billion over three years to expand data center capacity for Alibaba Cloud by 2032. The push into homegrown AI infrastructure positions Alibaba as a key domestic alternative to foreign chip suppliers and could materially influence how it competes in China's rapidly evolving cloud and AI market. The spending carries rising financial stakes: Alibaba's Cloud and AI segment grew revenue 45% year over year, yet EBITDA margins compressed and free cash flow swung to a roughly RMB 44.7 billion outflow. Alibaba's narrative projects CN¥1487.6 billion revenue and CN¥176.3 billion earnings by 2029, requiring 12.5% yearly revenue growth and about a CN¥103 billion earnings increase from CN¥73.3 billion today. The most optimistic analysts already expected Alibaba to reach about CN¥1,687.4 billion in revenue and CN¥362.0 billion in earnings by 2029, so the new AI capex push could either support that upbeat view or expose how aggressive those assumptions were.
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Wells Fargo Starts Applied Digital at Overweight, Calls It a Top Idea
Wells Fargo initiated coverage of Applied Digital Corporation on September 17 with an Overweight rating and a $50 price target, naming the data centre developer a Top Idea. Analyst Eric Luebchow values the roughly 1.4 gigawatts of contracted leases at about $30 a share on a net present value basis, against a pre-call close of $24.39, implying the signed book alone exceeds the share price and the unbuilt pipeline is valued at close to nothing. Wells Fargo puts the base-term value of those take-or-pay leases at about $36 billion, with renewals potentially taking that beyond $86 billion across three decades, and notes more than 70% of contracted megawatts sit directly with Meta and Oracle. The bank argues grid access rather than capital is the scarce input and that Applied Digital secured its utility allocations early, though the backlog pays nothing until built and is funded by up to $5 billion in preferred equity from Macquarie Asset Management drawn in tranches. Risks include concentration in three tenants, with the CoreWeave lease the weakest link despite Meta credit support, and the gap between contracted and delivered capacity ahead of the fiscal first-quarter report in mid-October.
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SB Energy Slows $50 Billion IPO as Debt Package Draws Weak Demand
SB Energy has slowed preparations for an initial public offering that had been discussed around a $50 billion valuation, according to a September 22 Financial Times report, while a $4.9 billion debt package has faced weak demand and yields around 10%. The SoftBank-backed developer says it has signed roughly 8.8 gigawatts of IT lease capacity, including the PORTS-Pike campus in Ohio for OpenAI, and Nvidia is the exclusive AI-compute provider for that site, providing credit support for an initial 4.25 gigawatts with an option covering another 3.75. Nvidia has already invested $1.5 billion and committed another $1.5 billion tied to the IPO, and has disclosed maximum guarantee exposure that can reach $105 billion under defined conditions. American Electric Power sits on the electricity and transmission side of the same buildout through AEP Ohio's regional power partnership around the SB Energy campus, with about 69 gigawatts of contracted load additions through 2030, roughly 90% of it tied to data centers. The IPO slowdown does not mean AI demand disappeared, but it signals that investors are starting to distinguish between contracted demand and financeable returns, and that the cost of capital has become part of the AI thesis.