Alibaba is doubling down on artificial intelligence as a key growth driver after reporting a sharp 66% year-on-year decline in quarterly net profit, reflecting ongoing pressure on its core e-commerce business.
The company posted net profit of 15.6 billion yuan ($2.2 billion), impacted by reduced operating income amid intensifying price competition and weak consumer demand in China. Total revenue reached 284.8 billion yuan, falling short of market expectations.
Despite the decline, Alibaba highlighted strong momentum in its AI segment. Revenue from its Cloud Intelligence Group rose 36% year-on-year, with CEO Eddie Wu positioning AI as a central pillar of future growth.
Alibaba is investing heavily in AI, focusing on emerging technologies such as AI agents—tools capable of performing real-world tasks like scheduling and communication. The company recently introduced “Wukong,” an AI agent for businesses currently in beta testing.
Its open-source Qwen AI models are also gaining traction globally, with the consumer interface surpassing 300 million monthly active users. To improve efficiency and monetization, Alibaba is restructuring its AI operations under a unified “Token Hub,” aiming to better align development and commercialisation efforts.
The broader industry trend points toward AI compute power—or “tokens”—becoming a critical utility, with major tech players racing to capitalise on this next phase of AI evolution.
