Alibaba Slides 4% Amid Reported Beijing AI Probe, Raising Value‑Trap Concerns

BABA shares fell 4% to $112.09 on Wednesday, September 23, after Bloomberg reported that China's regulators opened a probe into AI startups DeepSeek and Moonshot AI over data security concerns . Alibaba is not named in the reported probe, but its Qwen family of models sits in the same category regulators are said to be examining . The shares were down as much as 4.7% in midday trading.

The selloff was sharper than at peers: BIDU fell 2% to $90.26 and JD slipped 1% to $27.08, while the KraneShares CSI China Internet ETF lost 2% . The drop undercut a rally that followed Alibaba's Apsara conference in Hangzhou, where it unveiled a new line of AI chips it describes as China's most powerful and laid out plans for a 20-gigawatt global data center network by 2032 .

The move feeds a longer-running debate about Alibaba's spending. Fiscal 2026 capital expenditure rose 47% to RMB126.1 billion, about $18.1 billion, from RMB86 billion, and the ADRs have lost more than 40% of their value since October 2025. A TipRanks analysis placed the stock "somewhere between a value trap and a deep value opportunity," even as all 13 covering analysts rate it a buy.

What to watch: whether regulators widen the probe beyond DeepSeek and Moonshot, any comment from Alibaba on Qwen's data practices, and whether its AI chip and cloud buildout starts to show up in margins and free cash flow.