Amazon, the US-owned e-commerce company founded by Jeff Bezos and Alibaba, the Chinese digital giant founded by Jack Ma, have long been involved in fierce competition since the beginning of their existence.
Starting as an online shopping platform, both have grown into global technology empires encompassing e-commerce, cloud computing, logistics and now artificial intelligence (AI).
Since the early 2000s, Amazon has aggressively penetrated international markets with a strategy of scale expansion and technological innovation, while Alibaba has consolidated its dominance in China before expanding its influence to the global market.
Entering the 2010s, the competition shifted to the technology and cloud computing sectors through Amazon Web Services (AWS) and Alibaba Cloud. Now, the race has entered a more critical phase with AI becoming the mainstay of both companies' growth strategies.
Amazon accelerates AI investment for US government
In the latest development, Amazon announced on Monday that it will invest $50 billion to expand artificial intelligence and high-performance computing capacity across its cloud unit to meet the needs of US government agencies.
The project is expected to begin in 2026 and will add nearly 1.3 gigawatts of capacity through the construction of new data centers designed specifically for federal agencies. The investment will also provide access to a variety of AWS AI tools, including Anthropic’s Claude family of models, Nvidia chips and Amazon’s own custom Trainium AI chips.
The move solidifies Amazon’s position as a major player in large-scale AI infrastructure, particularly in the government and national security sectors.
Alibaba focuses on open-source AI models
Alibaba’s approach is different from most of its US competitors. The company has opted for an open-source, open-source AI model strategy that developers can download and use for free.
Alibaba’s AI models are now among the most popular globally, especially in the tech development community.
Alibaba CEO Eddie Wu has reinforced the company’s commitment to getting back to basics as an AI-centric company. In his first letter to employees after taking over, he stressed the need to revive a startup mentality with two key strategic priorities: user experience and AI dominance.
This focus is starting to show a positive impact on Alibaba’s cloud business performance, cementing its position as a major AI player in China.
The US-China technology race is becoming more pronounced
The competition between Amazon and Alibaba is no longer just a battle for the e-commerce market, but rather a technology race between two of the world’s superpowers, the United States and China.
AI is now seen as a key arena in determining the dominance of the digital economy, data control, and the direction of global innovation.
From the early competition in online shopping to the dominance of cloud computing and now AI, the two companies have continued to strengthen their respective strategic positions. In this new landscape, AI dominance not only promises a competitive advantage, but has the potential to shape the structure of the world’s digital economy in the long term.
