Key Moments
- Alibaba stock fell 4.8% on Friday to HK$90.4, after touching a 17-month low of HK$89.2.
- Anthropic formally alleged a large-scale AI distillation attack tied to operators linked to Alibaba’s Qwen AI lab.
- Alibaba filed a lawsuit against the U.S. Department of Defense to challenge its inclusion on the “Chinese Military Companies” list.
Market Reaction to Mounting Headwinds
Investing.com — Alibaba Group shares slid 4.8% on Friday to close at HK$90.4, after briefly dropping to HK$89.2, their lowest level in 17 months. The stock continued to face heavy selling pressure as investors reacted to a combination of reputational and geopolitical concerns.
Sentiment weakened further after funds managed by Cathie Wood disclosed that they had exited their positions in Alibaba’s American Depository Receipts on Thursday, adding another layer of pressure on the stock.
| Metric | Value |
|---|---|
| Friday close | HK$90.4 |
| Intraday low | HK$89.2 |
| Peak level referenced | HK$186.2 |
| Decline from October 2025 peak | Roughly 50% |
Anthropic’s Allegations Against Operators Linked to Qwen AI Lab
The main source of downside pressure on Alibaba this week stemmed from serious claims made by Anthropic. In a letter submitted to U.S. senators and White House officials, Anthropic formally accused operators linked to Alibaba’s Qwen AI lab of orchestrating a massive misuse of its Claude model.
According to Anthropic, these operators allegedly deployed nearly 25,000 fraudulent accounts to send tens of millions of requests to Claude, focusing on its most sophisticated functionality, including agentic reasoning and software engineering. Anthropic characterized the activity as the largest AI distillation attack it has encountered.
Legal Challenge to Pentagon Designation
Investor unease was compounded by a separate development on the regulatory front. Alibaba filed a lawsuit against the U.S. Department of Defense seeking removal from the Pentagon’s “Chinese Military Companies” list. This designation carries the risk of procurement bans and potential investment restrictions, adding to the company’s geopolitical overhang.
The combination of legal exposure and reputational damage has weighed heavily on market confidence. The stock is now trading at roughly half of its October 2025 high of HK$186.2.
Weak 618 Festival and Broader Market Pressure
Fundamental concerns also resurfaced after China’s 618 shopping festival, an important gauge of Alibaba’s core e-commerce strength, produced disappointing outcomes. The event showed sharply slowing growth, offering little counterbalance to the negative news cycle surrounding the company.
Alibaba’s decline has unfolded against a challenging backdrop for Hong Kong equities. The Hang Seng Index dropped below the 23,000 level in the previous session, reflecting persistent worries over Chinese technology stocks and notable net outflows from mainland investors via the northbound connect channel.
Peer Performance Offers No Support
Other major Chinese e-commerce players, including JD.com and Meituan, have also been dealing with a difficult operating environment marked by intense competition. Their own struggles have failed to provide any positive read-across or sympathy rally for Alibaba shares.
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