BABA Shareholder Alert: Alibaba Group Holding Limited Securities Class Action Lawsuit - Investors Should Contact SueWallSt

Time-Sensitive: Allegations Focus on Alibaba's AI "Distillation" Risk Representations — the lawsuit asserts that management described unauthorized distillation of third-party AI models as a hypothetical possibility while a large-scale campaign against Anthropic's Claude model was allegedly underway.

NEW YORK, Sept. 3, 2026 /PRNewswire/ -- SueWallSt alerts investors in Alibaba Group Holding Limited (NYSE: BABA) of a pending securities class action. Class Period: June 26, 2025 through June 24, 2026. Check if you might be eligible to recover your investment losses or contact Joseph E. Levi, Esq. at [email protected] | (888) SueWallSt.

BABA American Depositary Shares closed at $99.80 on June 24, 2026, down $2.80 (2.7%), then fell a further $4.73 (4.7%) to $95.07 on June 25, 2026. Measured from the Class Period high of $173.68, the decline is approximately $78.61 per ADS, or 45.26%. The Court has set October 5, 2026 as the deadline to apply for lead plaintiff appointment.

"Investors deserve transparency about material risks that could affect their investments. The complaint here contends that a risk factor describing unauthorized distillation of third-party models as something that could happen inadvertently was allegedly issued while the conduct at issue was already underway." -- Joseph E. Levi, Esq.

The Alleged Qwen AI Lab Distillation Campaign

On May 20, 2026, the Company's Annual Report on Form 20-F warned that its models "may inadvertently access and reproduce sensitive business or personal information" and that "[e]ven perceived or alleged misuse of personal data or unauthorized distillation of third-party models by our large language models may result in loss of confidence or trust." The action claims that language was materially misleading because it framed distillation as hypothetical and inadvertent. As alleged, operators linked to the Company's Qwen AI lab were at that time engaged in an ongoing effort targeting Anthropic PBC's Claude model.

Industry Context in AI Model Distillation

• "Adversarial distillation" refers to systematically querying a rival model to extract its capabilities and train a competing system at a fraction of the original development cost.
• Anthropic reportedly kept Claude out of the Chinese market, making direct authorized access unavailable.
• Bloomberg reported on June 24, 2026 that Anthropic described 28.8 million exchanges with Claude between April and June through nearly 25,000 fraudulent accounts.
• The capabilities allegedly targeted included software engineering and agentic reasoning, among Claude's most commercially valuable features.
• Anthropic reportedly told U.S. senators and White House officials this was the largest such attempt by a Chinese company to date, and cautioned that models built this way may lack safety guardrails.
• The lawsuit asserts that this gap between the disclosed hypothetical risk and the alleged ongoing conduct is what makes the representation actionable.

Why Distillation Disclosure Adequacy Allegedly Matters to Investors

As alleged, generic forward-looking risk language does not inform shareholders that a company is already exposed to a concrete controversy with a leading U.S. AI developer and to potential regulatory escalation. The action claims that when the Bloomberg report reached the market, ADSs declined over two consecutive sessions as investors reassessed the Company's AI business and its standing with U.S. policymakers. Investors who purchased during the Class Period at allegedly inflated prices may be eligible to seek compensation without payment of any out-of-pocket fees.

Learn more about the case or call (888) SueWallSt.

WHY SUEWALLST: SueWallSt is powered by Levi & Korsinsky LLP. Levi & Korsinsky LLP has established itself as a nationally-recognized securities litigation firm that has secured hundreds of millions of dollars for aggrieved shareholders and built a track record of winning high-stakes cases. The firm has extensive expertise representing investors in complex securities litigation and a team of over 70 employees to serve our clients. For seven years in a row, Levi & Korsinsky has ranked in ISS Securities Class Action Services' Top 50 Report as one of the top securities litigation firms in the United States.

Frequently Asked Questions About the BABA Lawsuit

Q: What specific misstatements does the BABA lawsuit allege? A: The complaint alleges Alibaba Group Holding Limited made materially false or misleading statements regarding its AI development practices, including characterizing unauthorized distillation of third-party models as a hypothetical or inadvertent risk, and regarding its status under the FY2025 NDAA definition of a "Chinese military company" through its MIIT affiliation. When those matters became public, the stock price declined sharply.

Q: Who is eligible to join the BABA investor lawsuit? A: Investors who purchased BABA stock or securities between June 26, 2025 and June 24, 2026 and suffered financial losses may be eligible. Eligibility is based on purchase date and documented losses, not on whether you still hold the shares.

Q: What court was the BABA class action filed in? A: The case was filed in the United States District Court for the Southern District of New York, governed by the Private Securities Litigation Reform Act of 1995.

Q: What is a lead plaintiff and why does it matter? A: A lead plaintiff is the investor appointed by the court to represent the entire class. Lead plaintiffs are typically investors with the largest documented losses. Being appointed does not increase individual recovery but gives direct oversight of how the case is run.

Q: What do BABA investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at [email protected] or (212) 363-7500. No immediate action is required to remain eligible as an absent class member.

Q: What if I already sold my BABA shares — can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold the shares. Investors who bought during the Class Period and sold at a loss may still be eligible to participate.

Q: What if I live outside the United States? A: U.S. securities class actions generally cover purchases on U.S. exchanges regardless of the investor's country of residence.

Q: What does it cost me to participate? A: There is no upfront cost to contact the firm. Securities class actions are generally handled on a pure contingency basis. No upfront fees, no retainer, and no out-of-pocket costs. Any attorneys' fees and expenses awarded to class counsel are subject to court approval.

CONTACT:

Levi & Korsinsky, LLP

Joseph E. Levi, Esq.

33 Whitehall Street, 27th Floor

New York, NY 10004

[email protected]

Tel: (888) SueWallSt

Fax: (212) 363-7171

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SOURCE SueWallSt.com