Alibaba reports 1st operating loss since 2021 amid AI investments
Alibaba and Tencent just released their latest earnings, and it is all about AI.
Even though Alibaba reported its first operating loss since 2021 (thanks to pouring cash into AI and cloud technology), its US shares actually jumped more than 8%.
CEO Eddie Wu is confident, saying annual recurring revenue from AI-related models and services could hit 10 billion yuan in June and 30 billion yuan by year-end.
Alibaba and Tencent intensify AI bets
Alibaba is not holding back: they have pledged $56 billion to build out everything from AI software to hardware over the next three years.
Their Qwen AI tool is already live on Taobao, plus they are launching business-focused products under WuKong.
Meanwhile, Tencent has upgraded its Hunyuan model with help from a former OpenAI researcher and has also embraced third-party AI systems including models from DeepSeek to power its chatbot offerings.
Both giants are feeling the heat as new players crowd in, and investors want to see all these big bets pay off soon.