Alibaba to invest 380 billion yuan in AI and cloud
Alibaba is going all in on artificial intelligence, announcing it will spend 380 billion yuan, or about $55.96 billion, in three years, even though profits are down.
The company's earnings for the quarter ended March 31 dropped well below expectations, mostly because it is pouring money into AI tech and cloud services, plus ongoing quick-commerce spending.
Still, Alibaba says this big investment is about staying ahead and shaping the future.
Alibaba Cloud revenue up 38%
Despite lower profits, Alibaba's Cloud Intelligence Group saw a 38% jump in revenue thanks to new AI tools like the Qwen chatbot on Taobao and Tmall.
CEO Eddie Wu says he cares more about "We aim to maintain growth that is faster than the market average in order to gain larger market share and firmly cement our absolute market leadership position... those are the primary objectives, and margin is still secondary," than short-term margins, expecting higher gross margins for Alibaba Cloud in the next one to two quarters.
Quick commerce is also booming: China's e-commerce sales beat forecasts, and executives think these speedy shopping platforms will turn unit economics positive by the end of fiscal year '27.