Alibaba Sets Up Nuclear-Linked Power Venture to Support AI Data Centers

This article first appeared on GuruFocus.

Alibaba Group Holding Ltd. (NYSE:BABA) is taking a measured step to confront one of the least discussed but most pressing constraints on large-scale AI expansion: access to power. The company has established a 250 million yuan joint venture with China National Nuclear Power Co. and several other partners, according to records on the corporate database Tianyancha, potentially positioning itself to secure stable electricity supply for future data center needs. Registration materials list energy generation as a focus of cooperation, although the filings stop short of outlining specific operational details, and Alibaba has not publicly commented on the arrangement.

The timing reflects a broader reckoning across the global technology sector as AI infrastructure places growing strain on energy systems. Outside China, companies such as Meta Platforms (NASDAQ:META) and Microsoft (NASDAQ:MSFT) have already signed agreements with nuclear power providers to ensure continuous, low-carbon electricity for data centers. Within China, government policy has leaned more heavily toward meeting computing demand through large-scale solar and wind deployment, making Alibaba’s nuclear-linked venture a possible supplement rather than a departure from the country’s prevailing renewable strategy.

Power availability has increasingly emerged as a shared concern for technology companies and governments alike, with fears that rapid AI build-outs could push electricity prices higher. In the United States, the Trump administration is advancing proposals that would require technology companies to help finance new power plants in an effort to accelerate AI development while easing pressure on consumer utility bills. For Alibaba, the issue is closely tied to capital allocation priorities: the company has earmarked more than $53 billion for AI development and research over several years, with a substantial portion expected to be directed toward data center construction, where dependable energy supply could become a defining factor.