Alibaba (BABA) Stock Falls to 16-Month Low After Anthropic AI Theft Accusation

TLDR

• Alibaba stock fell as much as 4.9% in Hong Kong, hitting a 16-month low
• Anthropic accused Alibaba of “illicitly” accessing its Claude AI model in a letter to the White House and U.S. senators
• The alleged method is “distillation” — training a weaker model on outputs from a stronger one
• The selloff spread to Baidu (BIDU) and Xiaomi (XIACY), both dropping more than 3%
• Alibaba is now down 33% this year, with Nomura cutting its 2027 EBITA forecast by 15%

Alibaba (BABA) stock touched a 16-month low in Hong Kong on Thursday after Anthropic accused the Chinese tech giant of illegally accessing its Claude AI model.

Alibaba Group Holding Limited, BABA

The stock dropped as much as 4.9% in Hong Kong trading. U.S.-listed BABA shares had already fallen 3% on Wednesday. The stock is now down 33% for the year.

Anthropic sent a letter to White House officials and several U.S. senators this week alleging that Alibaba was running an “industrial-sized” effort to illicitly access its Claude models, according to Bloomberg.

The practice is described as “distillation” — a technique where a less capable model is trained on the outputs of a more powerful one. Anthropic said the campaign was carried out by operators linked to Alibaba and its AI lab, Alibaba Qwen.

The accusation is not the first time Anthropic has raised this alarm. In February, the company said it had identified a similar effort by Chinese AI startup DeepSeek and two other Chinese AI labs to extract capabilities from its Claude platform.

DeepSeek made waves in January 2025 after releasing a low-cost AI model that rattled the technology world.

Selloff Spreads Across Chinese AI Names

The fallout didn’t stop at Alibaba. Baidu (BIDU) fell more than 3%, and Xiaomi (XIACY) also dropped over 3% as investors pulled back from Chinese AI-linked stocks more broadly.

The moves reflect growing concern that Chinese tech companies could face harder headwinds in the global AI race, even as they continue to offer products that are competitively priced.

Pressure Mounting From Multiple Directions

The timing is awkward for Alibaba. The company is already dealing with weak domestic consumption and softer sentiment toward Chinese internet stocks.

There’s also a rotation happening — investors are moving into hardware and semiconductor names in South Korea and Taiwan, pulling money away from the sector.

On the commerce side, Nomura analysts estimated that China’s June 18 shopping festival saw an 8% drop in core e-commerce revenue compared to a year ago. That came in well below market expectations for flat growth.

In response, Nomura cut its forecast for Alibaba’s 2027 EBITA by 15%.

Anthropic’s letter to U.S. officials marks a direct escalation, taking what would normally be a legal or technical dispute and placing it squarely in front of policymakers in Washington.

Alibaba has not publicly responded to the accusations as of Thursday.

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