Alibaba Group Holding Ltd. stock fell to a 16‑month low on the Hong Kong exchange after Anthropic PBC alleged the Chinese tech giant accessed its AI model illicitly. Shares slid 4.9%, pushing the year‑to‑date decline to 33%. Xiaomi and Baidu also slipped more than 3%.

Anthropic’s claims add to investor worry over Chinese firms’ ability to compete in the global AI race, even though they offer affordable, adequate products. U.S. regulators recently barred foreign nationals from Anthropic’s flagship Fable 5 and Mythos 5 models after a jailbreak was found in the tech sector.

Alibaba’s AI doubts weigh further on its shares as the company battles sluggish domestic consumption and a shift in investor focus toward hardware and semiconductor names in South Korea and Taiwan. The June 18 shopping festival saw an 8% drop in core e‑commerce revenue versus flat growth expectations in 2024.

Nomura International Hong Kong analysts cut their 2027 EBITDA forecast for Alibaba by 15%, citing weaker e‑commerce sales and heightened regulatory pressure. The drop in shares signals growing caution among investors eyeing Chinese AI firms amid tightening U.S. scrutiny for investors.