Alibaba’s revenue climbs 9% in testament to China’s AI boom
China’s e-commerce leader this year cemented its status as a global AI player
Alibaba Group Holding reported a 9 percent increase in revenue for the quarter ending June, reaching nearly 269 billion yuan (US$40 billion), in line with analyst expectations. However, the company's net income plummeted by over 75 percent to 10.5 billion yuan. The surge in China's AI development has intensified demand for the computing power provided by Alibaba's cloud arm, solidifying the company's position as a global AI player.
Alibaba's flagship Qwen model has become the world's most popular AI model family, and the firm has invested billions in chips, data centers, and agentic AI. Nonetheless, the company's efforts to compete with AI giants Anthropic PBC and OpenAI are reducing margins, while sluggish Chinese consumption impacts its core e-commerce business.
CEO Eddie Wu is prioritizing AI growth over short-term profits, with plans to allocate more than 380 billion yuan over three years to double cloud and AI revenue to $100 billion over five years. Despite spending heavily on AI infrastructure, Alibaba faces mounting pressure from investors to see returns from its AI investments, as many of its models are available for free or at low costs compared to US competitors.
The company has recently made its latest flagship model, Qwen 3.8 Max, open-weight, the first time it has released weights for its largest model class, signaling a shift towards monetization strategies as it competes with rivals like Tencent Holdings and ByteDance.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
