Key Highlights
- Shares of Alibaba declined up to 4.9% in Hong Kong trading, reaching their lowest level in 16 months
- AI company Anthropic claimed Alibaba illegally obtained access to its Claude AI technology in correspondence sent to White House officials and U.S. lawmakers
- The purported technique involves “distillation” — using outputs from an advanced model to train an inferior one
- Chinese tech peers Baidu (BIDU) and Xiaomi (XIACY) experienced declines exceeding 3% in sympathy
- Year-to-date losses for Alibaba now total 33%, prompting Nomura to slash its 2027 EBITA projection by 15%
Shares of Alibaba (BABA) plummeted to their lowest level in 16 months during Hong Kong trading on Thursday following serious allegations from artificial intelligence firm Anthropic regarding unauthorized access to its proprietary Claude AI system.
Alibaba Group Holding Limited, BABA
The Chinese e-commerce and cloud computing behemoth saw its shares sink as much as 4.9% in Hong Kong. American depositary receipts had already retreated 3% during Wednesday’s session. Year-to-date performance now shows a staggering 33% decline.
According to a Bloomberg report, Anthropic dispatched correspondence to White House administration members and multiple U.S. senators earlier this week, claiming that Alibaba was conducting a large-scale operation to improperly obtain its Claude AI capabilities.
This approach, known as “distillation,” involves developing an inferior artificial intelligence model by training it on responses generated by a superior system. Anthropic indicated that entities connected to Alibaba and its artificial intelligence division, Alibaba Qwen, were responsible for this operation.
This isn’t the first instance of Anthropic sounding the alarm on such activities. Back in February, the artificial intelligence company reported identifying comparable efforts by Chinese AI startup DeepSeek, along with two additional Chinese AI research facilities, attempting to replicate Claude’s functionality.
DeepSeek captured global attention in January 2025 following the launch of an economical AI system that disrupted expectations throughout the technology sector.
Broader Decline Hits Chinese Technology Sector
The negative market reaction extended well beyond Alibaba. Search engine giant Baidu (BIDU) experienced a decline surpassing 3%, while electronics manufacturer Xiaomi (XIACY) similarly dropped more than 3% as market participants retreated from Chinese artificial intelligence-related equities across the board.
These movements signal increasing anxiety that Chinese technology corporations may encounter stronger obstacles in the worldwide artificial intelligence competition, despite their ability to deliver attractively priced alternatives.
Challenges Intensifying From Various Fronts
The allegations arrive at an inopportune moment for Alibaba. The corporation is currently navigating sluggish consumer spending within China and deteriorating investor confidence toward Chinese internet companies.
Additionally, a significant capital reallocation is underway — market participants are shifting investments toward hardware and chip manufacturers in South Korea and Taiwan, draining capital from the segment.
Regarding its retail operations, analysts at Nomura calculated that China’s June 18 shopping event recorded an 8% year-over-year decrease in primary e-commerce revenue. This performance substantially missed market projections for unchanged growth.
Consequently, Nomura reduced its earnings before interest, taxes, and amortization forecast for Alibaba in 2027 by 15%.
Anthropic’s communication to U.S. government officials represents a significant intensification, transforming what might typically remain a legal or technical disagreement into a matter now receiving attention from Washington decision-makers.
As of Thursday, Alibaba had not issued any public statement addressing the allegations.
