Alibaba and Tencent lost US$66 billion in market value as investors questioned how their AI spending could generate returns, according to Bloomberg.

The sell-off came after recent earnings and strategy updates failed to give markets a clear near-term path for monetising AI.

Tencent lost about US$43 billion in value, while Alibaba’s US-listed shares shed roughly US$23 billion overnight.

The reversal followed a rally in Chinese AI-linked stocks, driven by excitement over agentic AI products and recent launches across the sector.

That optimism faded as investors shifted focus to whether rising spending on infrastructure, talent and model development would translate into meaningful revenue.

Alibaba’s latest results added to the pressure. The group is targeting US$100 billion in annual cloud and AI revenue within five years, even as investor concerns over profitability persisted.

Tencent is also increasing its AI spending, adding to concerns that heavier investment could weigh on margins before returns become clearer.

The sharp market reaction suggests investors are no longer rewarding AI spending alone.

Attention has shifted instead to whether China’s largest tech firms can show a clearer commercial payoff from their AI push.

Featured image: Edited by Fintech News Singapore, based on image by mizkit via Freepik