Alibaba, a leading Chinese big tech company, is partnering with a Chinese state-owned nuclear power company to take part in a nuclear power project. It is expanding beyond investing in next-generation nuclear technologies such as nuclear fusion to the development and operation of commercial nuclear power. As private capital's participation in nuclear power expands in China, some say Alibaba is aiming for two goals: "stable power procurement" and "a head start in the private nuclear power market."
According to China's Kechuangban Daily on the 22nd, Shanghai Yiqi under Alibaba recently set up a joint venture called Zhonghe (Xiangshan) Nuclear Energy Co. with Zhonghe Zheneng Energy under China National Nuclear Power, a state-owned nuclear power company, as well as Hongrun Construction and Youngor Group. The registered capital is 250 million yuan (about 52.8 billion won), and its business scope includes power generation, transmission and distribution; radiation monitoring; inspection and testing services; heat production and supply; power generation technology services; and investment activities.
According to the report, because nuclear power projects require demanding technology, safety regulations and massive capital, they have traditionally been pursued in China with state-owned corporations holding a controlling equity stake and local governments participating to a degree. Currently, the four state-owned corporations holding licenses to operate nuclear power are China National Nuclear Corporation, China General Nuclear Power Group, State Power Investment Corporation and China Huaneng Group.
In recent years, however, participation by private corporations has been gradually expanding. For Phase 1 of San'ao in Zhejiang, approved in 2020, automaker Geely invested 2%, and for Phase 1 of Jinqimen in Zhejiang, approved in 2023, auto parts company Wanxiang invested 2%. For the five new projects approved in Aug. 2024 (Xuwei Phase 1 in Jiangsu; San'ao Phase 2 in Zhejiang; Zhaoyuan Phase 1 in Shandong; Lufeng Units 1 and 2 in Guangdong; and Bailong Phase 1 in Guangxi), 10 private corporations contributed a total of 4.5 billion yuan (about 949.2 billion won), pushing private equity participation to 10% for the first time.
Industry watchers noted rising power demand at data and computing centers as the backdrop to Alibaba's investment. As the digital economy expands, demand for AI computing infrastructure and cloud services is growing, and power consumption at Alibaba-affiliated data centers is structurally increasing as a result. Given nuclear power's ability to supply large-scale, stable and continuous electricity, some see potential for a new "nuclear power + data center" supply model. It could not only enhance the stability of power procurement but also serve as a way to lower operating expenses over the long term.
Previously, Alibaba directly invested in NovaFusion, a fusion technology startup in Shanghai, and Ant Group, an Alibaba affiliate, invested in another fusion technology startup, Xingneng Xuanguang.
Pan Helin, an economist and Commissioner on the Expert Committee on Information and Communications Economy at the Ministry of Industry and Information Technology, said, "As the digital economy develops rapidly and power demand rises at Alibaba's data and computing centers, it can propose a new power supply model for computing called 'nuclear energy + data centers,'" and added, "This can enhance the stability of energy supply for core businesses and lower operating costs."
He went on to say, "As energy reform proceeds in China, if private nuclear power permits are gradually opened in the future, Alibaba can leverage this equity holding to enter the market quickly and enjoy a first-mover advantage, and nuclear power projects can be a high-quality 'stable investment target' that can provide Alibaba with sustained financial revenue."
Kechuangban Daily said, "Alibaba's investment in energy is not a one-off; it has already extended to investments in fusion startups," and assessed that "energy has become an important direction for Alibaba's strategic investments." It added, "China's power supply is relatively sufficient, so this investment is driven less by 'power shortages' than by alignment with the country's broader push for innovation in energy technology."