Technology group: AI investments cause Alibaba's profit to plummet - share price falls
The Chinese group's sales expectations are indeed met, but enormous expenditures for AI infrastructure surprise investors. Alibaba CEO Eddie Wu nevertheless speaks of a "strong quarter".
Alibaba's net profit plummeted 75 percent to 10.5 billion Yuan (1.55 billion dollars) in the last quarter due to high investments in Artificial Intelligence (AI). The company's expenses for AI infrastructure surged 75 percent to 67.7 billion Yuan. Despite a 9 percent increase in revenue to 269 billion Yuan, which exceeded expectations, the high AI spending deterred investors, causing the company's shares to drop around 6 percent in pre-market US trading.
Alibaba's cloud and AI business saw a 45 percent growth in revenue, with AI-related product sales increasing by over 100 percent for the 12th consecutive quarter.
Written by urgent.news from Handelsblatt's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
