- Alibaba’s cloud business surges on AI demand
- E-commerce struggles
- Company bets big on AI future
Cloud Nine
Alibaba Group’s recent quarterly earnings reveal a tale of two businesses. The tech giant’s cloud computing arm, bolstered by robust AI demand, emerged as the company’s growth engine.
Cloud Intelligence Group revenue jumped 6% year-on-year to 26.5 billion yuan, marking its fastest growth since September 2022. AI-related product revenue continued its triple-digit year-on-year growth trajectory.
E-commerce Blues
In contrast, Alibaba’s e-commerce division faced headwinds. Taobao and Tmall Group saw a 1% revenue decline to 113.4 billion yuan, falling short of analyst estimates.
This underwhelming performance raises questions about Alibaba’s efforts to maintain domestic market share amid intensifying competition from budget-focused rivals like PDD Holdings and ByteDance’s Douyin.
AI to the Rescue
CEO Eddie Wu Yongming expressed confidence in AI’s potential to drive future growth, projecting that more than half of the expected double-digit revenue growth from external customers in the second half of the fiscal year will be AI-driven.
Alibaba’s open-source large language model, Qwen, has already topped global rankings, positioning the company as a strong performer in China’s AI sector.
