Investing.com -- Alibaba Group will raise prices across several of its artificial intelligence computing and storage products, becoming the latest major technology firm to push through increases as demand for AI intensifies.

The company’s shares have risen around 3.7% in premarket trading on Wednesday.

Alibaba will lift prices for its T-Head AI computing chips by between 5% and 34%, while its Cloud Parallel File Storage service will become 30% more expensive.

The revisions include the Zhenwu 810E chip and follow a sweeping corporate overhaul aimed at sharpening the company’s focus on monetizing AI.

The e-commerce giant has rolled out new offerings, including an agentic AI service for businesses known as Wukong, part of an effort to capture what it describes as surging national enthusiasm for AI tools.

The company also created a Token Hub unit to consolidate its AI portfolio and accelerate commercial gains.

The moves come as rivals intensify their own push to turn AI spending into revenue. Tencent Holdings Ltd. recently announced a more than fourfold price increase for its Hunyuan foundation models, while Baidu plans to raise AI cloud product prices by up to 30% from next month. Google has also disclosed upcoming increases for some AI services.

The latest price adjustment arrives just ahead of Alibaba’s earnings report on Thursday.

Reacting to the news, Morgan Stanley analyst Gary Yu highlighted that "AliCloud attributed the rise to booming AI demand and significant hardware cost increases."

"This indicates the China clouds' price hike cycle is spreading from small players (Wangsu and UCloud) to industry leaders, and we expect more to come," the analyst added. "This price hike is in-line with our Alibaba bull case (50% cloud revenue growth in F27 with margin upside to 12-14% in F27-28)...which indicated that AliCloud has pricing power. We reiterate our OW and Top Pick for Alibaba."

Morgan Stanley believes the update "has positive readacross to all AI model players and infra players, such as Minimax, Knowledge Atlas, GDS, VNET, Kingsoft Cloud."