Alibaba Group Holding Ltd. (BABA) stock is having a rough Friday. Shares sank to a 52-week low after news broke that Anthropic, the AI company behind Claude, accused the Chinese tech giant of running a massive campaign to steal capabilities from its AI models.
According to a letter reviewed by Reuters, Anthropic told U.S. lawmakers—including Senator Elizabeth Warren and Senate Banking Committee Chair Tim Scott—that operators linked to Alibaba and its AI research unit, Qwen, conducted a large-scale "distillation" campaign between April 22 and June 5. Distillation is a technique where you train a less advanced AI model using outputs from a more capable one. Think of it as a student copying the homework of a top student, but at an industrial scale.
Anthropic alleges the operation used nearly 25,000 fraudulent accounts that generated more than 28.8 million exchanges with Claude. The goal, according to Anthropic, was to speed up China's development of AI systems that could approach the capabilities of Anthropic's Mythos Preview models.
This isn't happening in a vacuum. The White House accused China in April of systematically targeting intellectual property from leading American AI companies. And the Commerce Department has already restricted access to Anthropic's Mythos and Fable models over concerns about foreign military or intelligence users getting their hands on them.
So, where does that leave Alibaba stock? The technical picture is pretty grim. BABA is trading 20.1% below its 20-day moving average, 27.7% below its 50-day, and 38.1% below its 200-day. That's a lot of red. The 20-day is below the 50-day, which is below the 200-day—a "death cross" that happened in April. That's the technical way of saying the trend is firmly down.
Momentum is extremely stretched. The Relative Strength Index (RSI) is at 16.78, which is deep in oversold territory. That often means selling pressure has been intense and a bounce might be due. But oversold doesn't mean the trend has turned. It just means the move has been too far, too fast.
The stock is now trading below its previous 52-week low of $94.71. That's a red flag because old support can turn into new resistance. If buyers can't push the stock back above that level, the chart continues to tell a story of weak control by the bulls.
Key levels to watch: resistance at $94.71 (the old low that now acts as overhead supply) and support at $92.00, which is the current price area traders are defending in premarket.
As of premarket Friday, Alibaba shares were down 3.25% at $91.98, hitting a new 52-week low. It's a reminder that in the world of AI competition, the stakes are high—and the market is watching closely.
