By Jeanny Yu

(Bloomberg) -- Alibaba Group Holding Ltd. shares slid to a 16-month low in Hong Kong after Anthropic PBC accused the Chinese technology giant of "illicitly" accessing its artificial intelligence model.

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The company's stock tumbled as much as 4.9%, extending this year's decline to 33%. Other Chinese firms that develop large language models also fell, with Xiaomi Corp. and Baidu Inc. both dropping more than 3%.

Anthropic's accusations heighten investor unease over the ability of Chinese tech firms to compete in the global AI race, even though they have so far managed to offer reasonably priced, good‑enough products. The US this month ordered Anthropic to bar foreign nationals from accessing its most advanced AI platforms after discovering it's possible to "jailbreak" its latest Fable 5 model.

"Chinese AI models face an elevated risk of a US ban," said Robert Lea, an analyst at Bloomberg Intelligence in Hong Kong. "The White House's prohibition on foreign access to Anthropic's flagship Fable 5 and Mythos 5 models signals a shift toward a more aggressive US regulatory posture on AI."

Doubts over Alibaba's AI progress are weighing on its shares, as the company also contends with the backdrop of sluggish domestic consumption. Adding to the jitters is a rotation away from Chinese internet firms toward hardware and semiconductor companies in South Korea and Taiwan.

China's recent June 18 shopping festival saw an estimated 8% drop in core e-commerce revenue from a year earlier, versus the market's consensus of flat growth, Nomura International Hong Kong analysts including Jialong Shi wrote in a client note published on Wednesday. They cut their forecast for Alibaba's earnings before interest, taxes, and amortization for its 2027 financial year by 15%.

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