Key Takeaways
- Alibaba shares declined by as much as 4.9% in Hong Kong, reaching their lowest level in 16 months
- Anthropic formally notified the White House and U.S. senators that Alibaba allegedly accessed its Claude AI technology without authorization
- The purported technique involves “distillation” — using outputs from an advanced AI model to train an inferior system
- Other Chinese tech firms including Baidu (BIDU) and Xiaomi (XIACY) experienced declines exceeding 3%
- Year-to-date, Alibaba has lost 33% of its value, prompting Nomura to reduce its 2027 EBITA projection by 15%
Shares of Alibaba (BABA) plummeted to their lowest level in 16 months during Thursday’s Hong Kong trading session after Anthropic formally accused the e-commerce behemoth of unauthorized access to its proprietary Claude AI technology.
Alibaba Group Holding Limited, BABA
The Hong Kong-listed stock experienced a decline of up to 4.9% during Thursday’s session. Stateside, BABA shares had previously retreated 3% on Wednesday. Year-to-date losses now total 33%.
This week, Anthropic dispatched a formal communication to White House representatives and multiple U.S. senators claiming that Alibaba orchestrated a large-scale operation to improperly obtain access to its Claude AI systems, Bloomberg reported.
The alleged methodology, known as “distillation,” involves leveraging the responses from a sophisticated AI system to develop a less advanced model. Anthropic indicated that the operation was conducted by entities connected to Alibaba and its artificial intelligence division, Alibaba Qwen.
This isn’t the first instance where Anthropic has sounded the alarm on such activities. Back in February, the organization reported identifying comparable efforts by Chinese AI startup DeepSeek along with two additional Chinese AI research facilities attempting to replicate capabilities from its Claude system.
DeepSeek captured international attention in January 2025 following the launch of an economically efficient AI model that disrupted the tech industry.
Chinese Tech Sector Experiences Broader Decline
The negative sentiment extended beyond Alibaba. Baidu (BIDU) experienced a decline surpassing 3%, while Xiaomi (XIACY) similarly dropped more than 3% as market participants retreated from Chinese technology companies with AI connections.
These market movements underscore increasing anxiety that Chinese technology enterprises may encounter more substantial obstacles in the worldwide AI competition, despite continuing to deliver competitively priced offerings.
Challenges Accumulating on Multiple Fronts
The situation couldn’t come at a worse time for Alibaba. The corporation is simultaneously navigating sluggish consumer spending domestically and deteriorating investor confidence in Chinese internet companies.
Additionally, a sector rotation is underway — capital is flowing toward hardware and chip manufacturers in South Korea and Taiwan, draining investment from the sector.
Regarding e-commerce operations, Nomura analysts calculated that China’s June 18 shopping event registered an 8% year-over-year decline in primary e-commerce revenue. This performance significantly missed market projections anticipating flat growth.
Consequently, Nomura slashed its Alibaba 2027 EBITA forecast by 15%.
Anthropic’s correspondence with U.S. government officials represents a significant intensification, transforming what might typically remain a technical or legal matter into a political issue directly presented to Washington decision-makers.
As of Thursday, Alibaba has not issued any public statement addressing the allegations.
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