Here's a sentence you probably didn't expect to read in 2025: Alibaba Group Holding Ltd. (BABA) just went nuclear. The Chinese e-commerce giant is following Microsoft (MSFT) and Meta Platforms Inc. (META) into the atomic energy business, and the reason is simple. AI needs electricity. Lots of it.
This week, Alibaba established a 250 million yuan ($35.9 million) joint venture with China National Nuclear Power Co. and several other partners, according to Bloomberg, which cited filings in the Tianyancha database. The goal is straightforward: secure the massive amounts of power required to run AI data centers without waiting around for the regular grid to catch up.
If this sounds familiar, that's because American tech companies are doing the exact same thing. Meta and Microsoft have both forged nuclear power agreements to guarantee access to clean, always-on electricity for their energy-hungry computing operations. When your business model requires training giant language models and running inference at scale, you can't exactly rely on brownouts being acceptable.
The Grid Can't Keep Up
The infrastructure problem is real, especially in the United States. Big Tech is increasingly turning to nuclear power because grid limitations are actively slowing down data center expansion. An Alphabet Inc. (GOOGL) Google executive recently pointed out that grid interconnection delays sometimes stretch beyond a decade. Yes, ten years. So the workaround? Place data centers directly next to power plants and skip the grid entirely.
This isn't just a tech industry curiosity anymore. The surge in AI-driven data center demand has caught the attention of investors and policymakers. Michael Burry recently urged President Donald Trump and Vice President JD Vance to accelerate a $1 trillion investment in nuclear energy and grid upgrades. Meanwhile, Tesla Inc. (TSLA) chief Elon Musk has advocated for the broader energy shift, though he argues that solar power will eventually dominate global energy generation.
The pattern is clear: AI companies need reliable baseload power, and nuclear is one of the few sources that can deliver clean electricity around the clock without depending on weather conditions. Coal is politically toxic, natural gas has emissions issues, and renewables need backup. Nuclear checks the boxes, which is why tech giants are suddenly interested in uranium.
Alibaba's Open-Source AI Play
Alibaba isn't just securing power for its data centers. The company is accelerating its AI ambitions by doubling down on open-source development as adoption of its Qwen models continues to rise. Alibaba has said that openness will define its 2025 AI strategy, and the numbers back up that commitment.
The Qwen model family has now surpassed 700 million downloads, a milestone that has boosted investor confidence and supported recent gains in Alibaba Cloud investment. But here's the interesting part: Alibaba isn't trying to sell the AI models themselves. Instead, the company is using open-source AI as a way to drive demand for its cloud infrastructure.
Alibaba Group chairman Joe Tsai explained the monetization logic at a November event in Hong Kong. "We run a cloud computing business," Tsai said. "When you run models, you need to have cloud infrastructure. If people are running AI and they happen to want to use Alibaba Cloud, we have a whole suite of products from storage to data management to security to networking to containers."
It's a smart strategy. Give away the models, charge for the infrastructure needed to run them. The more people use Qwen, the more they need Alibaba Cloud. And the more cloud computing Alibaba does, the more electricity it needs, which brings us back to that nuclear power joint venture.
BABA Price Action: Alibaba shares were up 3.21% at $167.61 during premarket trading on Wednesday.
