Tech giant Alibaba posts AI-fuelled revenue boost

Chinese technology giant Alibaba reported a surge in revenue for its latest quarter, driven by the worldwide artificial intelligence (AI) boom, according to results released on Thursday. The Hangzhou-based company, which has poured tens of billions of dollars into AI development, revealed that its revenue for the period ending June 30 reached nearly 269 billion yuan ($40.0 billion), marking a nine percent increase compared to the previous year.

This growth, however, came with a significant dent in net profit, which plummeted 76 percent year-on-year to 10.5 billion yuan, attributed to substantial strategic investments and economic challenges in its domestic market.

CEO Eddie Wu described the quarter as "strong," attributing the positive trend to the successful commercialization of Alibaba's full-stack AI capabilities. Wu highlighted that Alibaba Cloud's external revenue grew by an accelerated 45 percent, with AI-related product revenue achieving triple-digit growth for the twelfth consecutive quarter.

Alibaba is renowned for its open-source "Qwen" AI models, which have garnered global popularity among developers. Additionally, the company operates some of China's largest online shopping platforms, such as Taobao.

Despite the robust revenue numbers, Alibaba faces persistent challenges from a prolonged downturn in consumer spending within China. This slump has intensified competition and downward pressure on prices across the e-commerce sector, posing ongoing concerns for the company's profitability and market positioning.