The Alibaba Problem: Will outbound investment restrictions on AI cover Alibaba?

Summary

The tight control by the PRC over China’s AI sector and the likely drive for the military application of this technology has raised concerns in Washington DC, London, and across Europe, where policymakers are considering outbound investment restrictions. Sam Goodman argues that given Alibaba’s central role in the PRC’s attempts to develop and compete with the US on AI rapidly, it is hard to see how it could avoid being covered by outbound investment restrictions. If the UK presses ahead with outbound investment restrictions on China’s AI sector, it will present investors with an Alibaba-shaped problem. More serious consideration for Alibaba’s potential integration into the PRC’s military sector is necessary as investors scrutinise the ESG standards of companies to invest in.