China’s Alibaba reports 38% jump in AI and cloud revenue as it races to grow

Alibaba’s AI and cloud revenue grew 38% year-over-year in the January-March quarter, reaching 243 billion yuan ($36 billion) overall, though total revenue rose only 3%. The Cloud Intelligence Group, which covers AI and cloud services, saw accelerated growth, up 38% from the same period last year, outpacing the 36% and 34% increases reported in the prior two quarters. The company reported an 848 million yuan ($125 million) operational loss, a sharp decline from the 28.5 billion yuan profit recorded in the same quarter last year. Rising technological investments, including a 380 billion yuan pledge for AI and cloud infrastructure over three years, contributed to higher expenses. Alibaba integrated its Qwen AI app with its e-commerce platform Taobao, enabling users to browse, compare products, place orders, and manage deliveries through natural language. It also launched Wukong, an agentic AI tool for commercial customers, and raised prices for some AI services. CEO Eddie Wu stated that Alibaba’s AI efforts have moved beyond the investment phase into commercialization at scale. Analysts predict AI-related growth will accelerate further, with Alibaba targeting over $100 billion in annual AI and cloud revenue within five years. Rivals like Tencent also reported weaker-than-expected revenue, though some analysts suggest its AI investments may soon yield returns. Morningstar’s Chelsey Tam noted that capital expenditure in Chinese AI firms will remain high as companies shift focus from user acquisition to monetization.