Alibaba’s quarterly net profit fell 66% as AI revenue surged, with CEO Eddie Wu declaring artificial intelligence a primary growth engine for the Chinese tech giant
BEIJING: Alibaba Group is banking on artificial intelligence to drive future growth, even as the Chinese tech giant reported a sharp 66% year-on-year drop in quarterly net profit.
Net profit for the October-December period plunged to 15.6 billion yuan (RM10.3 billion), which the company attributed primarily to a decrease in income from operations.
Total revenue for the quarter stood at 284.8 billion yuan, missing estimates from a Bloomberg survey of economists.
CEO Eddie Wu emphasised the strategic importance of AI, stating revenue from the Cloud Intelligence Group surged 36% year-on-year. “AI is and will continue to be one of our primary growth engines,” Wu said on Thursday.
The company’s core e-commerce business faces pressure from intense price wars and sluggish consumption in China’s economy.
Alibaba is channelling tens of billions of dollars into AI development, with shareholders watching closely for returns on these massive investments.
Chinese tech firms are racing to develop AI agents that perform real-world tasks like sending emails or booking flights.
This week, Alibaba announced a business AI agent named Wukong, which is currently in beta testing.
The move follows the surprise popularity in China of OpenClaw, an agent tool created by an Austrian researcher that has captivated programmers globally.
Alibaba’s open-source “Qwen” AI models have gained significant traction worldwide. Wu revealed that the Qwen consumer interface now boasts over 300 million monthly active users.
The company is consolidating its AI development and services teams under a new “Alibaba Token Hub” to improve focus and profitability.
AI entrepreneur Max Liu, who has collaborated with several local startups, said the previous structure was too dispersed for effective collaboration. Liu told AFP that the OpenClaw phenomenon has made big tech companies recognise “token” as a new utility, similar to water and electricity.
