Alibaba’s AI cloud growth surge drives earnings despite soaring tech spending

Alibaba Group Holding reported a 45% growth in revenue for its cloud and artificial intelligence division in the June quarter, driving adjusted profit to 27.3 billion yuan (US$4 billion). The AI Cloud and Compute Services segment, responsible for the company's cloud business and T-Head chip arm, recorded 48.4 billion yuan in revenue, marking its fastest growth pace in 22 quarters.

AI-related product revenue maintained triple-digit growth for the 12th consecutive quarter, reaching 12.4 billion yuan, up from 8.97 billion yuan in the previous quarter. Despite a 30% year-on-year drop in adjusted Ebitda to 27.3 billion yuan and a surge in capital expenditure by 75% to 67.7 billion yuan, Alibaba's total revenue increased 9% year on year to 269 billion yuan.

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