Alibaba Group (NYSE:BABA) recovered its losses from Tuesday in Wednesday premarket trading, supported by its ongoing push into artificial intelligence (AI).

The Chinese e-commerce titan is strategically expanding its global footprint, most recently by opening a second data center in Dubai, nine years after establishing its first, to capitalize on soaring demand for cloud computing services in the region.

This expansion targets a critical nexus of emerging technology. Eric Wan, Vice President of Alibaba Cloud International and Regional General Manager at Alibaba Cloud Intelligence, emphasized the strategic importance of the location.

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Wan told Reuters that the Middle East’s strategic position and collaborative ecosystem make it an ideal location for accelerating AI adoption among both private and public sector companies.

The move aligns with the United Arab Emirates’ aggressive investment in AI initiatives, including the construction of the largest AI campus outside the U.S. in partnership with industry giants like Nvidia (NASDAQ:NVDA) and OpenAI.

Alibaba Cloud is already forging local partnerships, such as one with Abu Dhabi-backed digital lender Wio Bank, leveraging Dubai’s infrastructure to accelerate AI deployment.

Alibaba Cloud Deploys Targeted Discounts

Simultaneously, Alibaba Cloud is rolling out a focused pricing strategy to spur international adoption. The company is cutting prices for its Elastic Compute Service (ECS) by up to 10.2% in specific international markets, including Frankfurt, Tokyo, and Dubai, effective October 30.

Industry sources conveyed to Yicai that while country-specific ECS pricing is standard practice, these targeted discounts signal a deliberate, market-by-market strategy aimed at driving foreign adoption.

Frankfurt, which has served as a key European hub for Alibaba Cloud since its first data center opened there in 2016, is slated to receive the largest discounts. The company expanded its presence there with a third German data center in 2022.

This regional focus is part of a broader global push. At its annual Aspara Conference in September, Alibaba Cloud unveiled an ambitious global infrastructure expansion plan that includes new cloud regions in Brazil, France, and the Netherlands, alongside data center expansions in Mexico, Japan, South Korea, Malaysia, and Dubai.

Tsai Eyes Symbiotic US-China Future

The stock’s impressive 92% year-to-date gain reflects growing investor confidence in its cloud unit and emerging AI models.

Adding to the positive sentiment, Alibaba Group Chair Joe Tsai expressed optimism regarding U.S.-China trade relations.

Tsai stated he expects the two countries to avoid a “race to the bottom” and instead recognize the symbiotic nature of their economic relationship, as SCMP cited from his statement to CNBC on October 10 at an NBA pre-season game.

Internally, Tsai highlighted the material impact of AI, which now contributes to approximately 30% of the company’s code development.

Price Action: BABA stock was trading higher by 2.44% to $166.83 premarket at last check Wednesday.

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