Alibaba Reports 38 Percent Surge in AI and Cloud Revenue Amid Growth Efforts

Alibaba Sees Accelerated Growth in AI and Cloud Businesses

Hong Kong — China's Alibaba has announced that its artificial intelligence and cloud businesses have experienced growth acceleration in the latest quarter, driven by the AI boom. Despite overall revenue rising only 3% to 243 billion yuan, the company's Cloud Intelligence Group saw a significant jump of 38% in revenue from the January-March quarter compared to the same period last year.

This growth rate was faster than the 36% and 34% increases seen in the previous two quarters, respectively. However, the company recorded an operational loss of 848 million yuan for the quarter, a sharp decline from the 28.5 billion yuan gain it reported during the same period last year. The main reason for this decline in profitability was the rising expenses associated with technological investment.

As technology companies globally invest heavily to boost infrastructure in support of the ballooning AI demand, Alibaba is no exception. The company has pledged investments of at least 380 billion yuan over three years in cloud computing and AI infrastructure. This week, Alibaba announced that it has fully connected its flagship Qwen AI app to its e-commerce platform Taobao, allowing users to browse, compare, place orders, and manage deliveries through natural conversation.

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Alibaba's AI has moved beyond the initial investment phase and progressed towards commercialization at scale. The company has launched its "agentic" AI tool Wukong in March and raised prices for some AI services. Many technology companies are now facing the challenge of boosting AI-related revenue and proving that the huge investment costs can pay off.

For Alibaba, "we should expect AI-related growth to accelerate further," said Jacob Cooke, CEO of Beijing-based consultancy WPIC Marketing Technologies. Alibaba has pledged a goal of surpassing $100 billion in annual AI and cloud revenue within the next five years.