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Alibaba AI push lifts cloud revenue as profit drops 75%
Cloud and AI revenue rose 45% to 48.44 billion yuan, while Alibaba raised AI infrastructure capex 75% to 67.68 billion yuan.
Alibaba reported that quarterly net profit for the April to June period fell 75% from a year earlier, even as overall revenue increased 9%, according to Yahoo Finance.
The company said revenue from its AI and cloud and computing business climbed 45% to 48.44 billion yuan for the quarter ended in June, and its AI model as a service segment has surpassed 16 billion yuan in annual recurring revenue.
Management said it expects AI spending to break even within three years, tied to replacing commercially bought processors in data centers with in-house T-head chips, which are already deployed on large AI “supernodes.”
Alibaba also pointed to heavier investment, with capex up 75% to 67.68 billion yuan, as it continues a planned 380 billion yuan spend on AI infrastructure through 2029. Adjusted earnings were 8.52 yuan per American Depositary Share, and adjusted net income fell 38% to 20.7 billion yuan, with Yahoo Finance noting part of the decline included a one-time European Commission fine.