Alibaba accelerates data center expansion in Europe, Middle East as AI arms race goes global

Alibaba Cloud is pushing aggressively into new territory. The company announced plans to establish its first cloud regions in Turkey, Finland, and the Netherlands within the next 12 months, adding to an already expanding global footprint that spans Malaysia, Germany, the UAE, France, and Hong Kong.

The announcement, made during the Apsara conference in Hangzhou, is part of Alibaba Group’s broader $53 billion investment plan in AI and cloud infrastructure. That figure, roughly 380 billion yuan, was first laid out in 2025 and covers a three-year spending window.

The scale of what Alibaba is building

Alibaba’s infrastructure roadmap targets a 20-gigawatt global data center network by 2032. Citigroup estimates that if Alibaba pulls this off, the network could generate over $160 billion in external cloud revenue.

Alibaba Cloud executive Li Feifei revealed that the company is advancing its ability to train AI foundation models with parameters ranging from 5 to 10 trillion. Alibaba Cloud launched a second data center in Dubai in October 2025, nine years after opening its first facility in the city. Additional developments in Brazil and France have further deepened the company’s international presence.

Why Europe and the Middle East matter

The European Union and several Middle Eastern nations have implemented increasingly strict data localization requirements, meaning companies that want to serve enterprise customers in those regions often need physical infrastructure on the ground. Alibaba’s localized approach positions it to comply with these frameworks in ways that give it an edge over competitors who haven’t yet built out equivalent regional capacity.

The geopolitical chess match

Alibaba’s global cloud push is unfolding against the backdrop of intensifying US-China competition in artificial intelligence. Washington has imposed export controls on advanced AI chips destined for China. The company’s focus on training ever-larger foundation models suggests it’s not content to simply rent out server space. Alibaba wants to offer enterprise customers generative AI services built on its own models.

Citigroup’s $160 billion revenue estimate for Alibaba’s eventual 20 GW network suggests the bank, at least, thinks the economics work.

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