Key takeaways
- Alibaba shares fell as much as 4.9% in Hong Kong trading, reaching their lowest level in 16 months.
- Anthropic claims that Alibaba gained unauthorized access to its Cloud AI system through “distillation” techniques.
- The AI company detailed these allegations in correspondence it sent to White House officials and US lawmakers
- Other Chinese tech companies including Baidu (BIDU) and Xiaomi (XIACY) saw declines exceeding 3%.
- Year-to-date, Alibaba shares have fallen 33%, prompting Nomura to cut its 2027 EBITDA forecast by 15%.
Alibaba (BABA) shares hit a 16-month low during Thursday trading in Hong Kong following serious allegations from Anthropic about unauthorized access to its artificial intelligence technology.
Alibaba Group Holding Co., Ltd., Alibaba
The Chinese e-commerce and cloud computing giant saw its shares fall as much as 4.9% during Hong Kong market hours. This follows a 3% decline in US-listed stocks on Wednesday. Losses since the beginning of the year until now amount to 33%.
According to Bloomberg reports, Anthropic sent correspondence to White House staff and several US senators this week, alleging that Alibaba was conducting what it describes as an “industrial-sized” operation to illicitly access its Cloud AI models.
The so-called technique, known as “distillation,” involves training a lower-level AI system using the output generated by a more complex model. Anthropic It claims that this campaign was carried out by entities linked to Alibaba and its AI research division, Alibaba Coin.
This is not the first time Anthropic has raised the alarm about such activities. Last February, the organization identified a similar operation involving Chinese AI startup DeepSeek, along with two additional Chinese AI labs trying to extract functionality from Claude’s infrastructure.
DeepSeek gained huge attention in January 2025 after launching a budget-friendly AI model that revolutionized the technology sector.
Broader impact on Chinese technology stocks
The market reaction extended even further Alibaba. Search engine giant Baidu (BIDU) saw a decline of more than 3%, while electronics manufacturer Xiaomi (XIACY) similarly fell more than 3% as market participants retreated from Chinese stocks related to artificial intelligence across the board.
These moves indicate growing concern that Chinese technology companies may face greater hurdles in competing with AI around the world, even though they continue to offer solutions at competitive prices.
Accumulating challenges from various fronts
The timing of these accusations could not be worse for Alibaba. The company is simultaneously facing a slowdown in domestic consumer spending and deteriorating investor confidence in Chinese internet companies.
In addition, a rotation is underway in the sector, as capital flows toward hardware and chip manufacturers in South Korea and Taiwan, draining resources from the Chinese technology space.
On the e-commerce front, Nomura analysts calculated that China’s June 18 shopping event saw an 8% year-on-year decline in core e-commerce revenues. This performance was well below consensus market expectations of stable growth.
As a result, Nomura lowered its 2027 EBITDA forecast for Alibaba by 15%.
The humanitarian correspondence with US government officials represents a major escalation, turning what would normally remain a legal or technical issue into a concern for policymakers in Washington.
As of Thursday, Alibaba had not issued any public statement addressing these accusations.
