Alibaba Quarterly Profit Drops 75% as AI Investment Spending Grows
AI-related cloud revenue rose 45% as capital spending jumped 75%, while net income fell 75% and free cash flow turned sharply negative, Alibaba said.
- On Thursday, Alibaba reported a 9% rise in quarterly revenue, driven by strong AI demand fueling its cloud business, though adjusted profit missed estimates due to heavy capital expenditure.
- Capital expenditure surged 75% to 67.68 billion yuan as the firm prioritized AI infrastructure, driving a 45% revenue increase in AI cloud and compute services to $7.21 billion.
- Quarterly revenue reached nearly 269 billion yuan, bolstered by the extended "618" shopping festival, while net profit plunged 76% to 10.5 billion yuan reflecting strategic investments and domestic economic pressure.
- Alibaba CEO Eddie Wu highlighted "improving commercialization of our full-stack AI capabilities" as a key driver, with the firm earlier creating the "Alibaba Token Hub" group to accelerate AI profitability.
- Facing pressure from a persistent consumer slump, the Hangzhou-based giant sharpens its AI focus while affiliate Ant Group reported 1% profit growth pivoting toward agentic AI commerce and digital health.
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74 Articles
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Alibaba’s Profit Plunges as E-Commerce Business Falters, AI Investment Jumps
Alibaba’s Profit Plunges as E-Commerce Business Falters, AI Investment Jumps - The tech giant reported a 75% drop in net income in the second quarter on revenue of 269 billion yuan, up 9% year-on-year
Alibaba Net Income Plunges 75 Percent, Operating Income Falls 57 Percent
Alibaba Group’s net income plunged 75 percent in the June quarter, while operating income—profit from its core business operations—fell 57 percent as the Chinese technology giant continued heavy spending on artificial intelligence and computing infrastructure. Net income fell to 10.4 billion yuan ($1.54 billion) for the three months ended June 30, from 42.4 billion yuan ($6.25 billion) a year earlier, according to Alibaba’s quarterly results. Op…
Alibaba, China's largest e-commerce company, saw its net profit plummet in the second quarter of this year as it significantly expanded its investment in artificial intelligence (AI) infrastructure. Despite the deterioration in short-term profitability, Alibaba plans to continue aggressive investments, positioning AI as a core growth engine. According to Bloomberg and other sources on the 20th (local time), Alibaba's net profit for the second qu…
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