Chinese tech giant Alibaba posts profit drop amid AI drive
Alibaba reported an 18% year-on-year net profit drop to 105.9 billion yuan ($15.6 billion) for the fiscal year ended March 31, citing economic challenges and heavy AI investments. The company emphasized progress in commercializing AI, integrating its Qwen models into Taobao and investing in AI startups like DeepSeek, while revenue grew 3% to 243.4 billion yuan in the latest quarter.
Chinese tech giant Alibaba announced a net profit decline of nearly 20% for its fiscal year ending March 31, with earnings falling to 105.9 billion yuan ($15.6 billion) from 129.5 billion yuan the prior year. The company attributed the drop to economic pressures and its costly push into artificial intelligence, including tens of billions spent on AI development. Revenue for the most recent quarter rose 3% year-on-year to 243.4 billion yuan, though shares in Hong Kong and the U.S. have struggled despite global AI investment trends. CEO Eddie Wu highlighted progress in scaling AI investments, describing Alibaba’s AI efforts as moving from incubation to commercialization. The company’s open-source Qwen AI models gained traction globally, and its latest integration of Qwen’s agentic features into the Taobao shopping app aims to enhance user tasks. Analysts from Bloomberg Intelligence suggested Alibaba will continue heavy AI spending to drive adoption in fiscal 2027. Alibaba is reportedly in talks with Tencent to invest in AI startup DeepSeek, which could value the company at up to $50 billion, following its April model release. Alibaba’s own AI tools, like the video generator HappyHorse, have also drawn attention for their performance benchmarks. Meanwhile, rival Tencent reported a 21% quarterly net profit jump, reflecting its own AI investments. The earnings come amid a shifting regulatory landscape, with Alibaba’s co-founder Jack Ma reemerging in February 2025 after a prolonged low profile following China’s 2020 crackdown on tech giants. Ma’s meeting with President Xi Jinping signaled a thaw in relations, though he remains a non-executive shareholder. Alibaba’s focus on AI integration across its ecosystem underscores its strategy to offset challenges in core e-commerce amid price wars and sluggish domestic consumption.
This content was automatically generated and/or translated by AI. It may contain inaccuracies. Please refer to the original sources for verification.