Alibaba Group reported a 75% year-on-year decline in net profit to 10.5 billion yuan ($1.55 billion) for the quarter, as heavy investments in artificial intelligence infrastructure weighed on earnings.
The company attributed the profit drop to a 75% surge in spending on AI infrastructure, which rose to 67.7 billion yuan. Revenue grew 9% to 269 billion yuan, reflecting the company’s strategic pivot toward cloud and AI services amid weaker traditional e-commerce performance.
Cloud computing and AI revenue accelerated to 45% growth, while AI-related product sales have now expanded for 12 consecutive quarters in triple-digit percentage terms. Alibaba’s cloud division, a key driver of this growth, continues to benefit from rising enterprise demand for AI solutions.
Chairman and CEO Eddie Wu emphasized the company’s progress in monetizing its AI capabilities, stating that Alibaba is well-positioned to capitalize on accelerating demand for artificial intelligence technologies. The executive highlighted the improved commercialization of the group’s AI portfolio as a key factor behind the quarter’s results.
The earnings report underscores Alibaba’s aggressive push into AI, even as profitability in its core commerce segment remains under pressure. The company’s shift toward higher-margin cloud and AI services reflects broader industry trends favoring technology infrastructure over traditional retail models.
