Alibaba Profit Drops 75% to $1.6 Billion as AI Spending Jumps to $10 Billion
Updated
Updated · abcnews.com · Aug 20
Alibaba Profit Drops 75% to $1.6 Billion as AI Spending Jumps to $10 Billion
3 articles · Updated · abcnews.com · Aug 20
Summary
10.5 billion yuan in quarterly profit left Alibaba down 75% from a year earlier, even as April-June revenue rose 9% to nearly 269 billion yuan.
67.7 billion yuan in capital spending—up 75%—weighed on earnings as Alibaba expanded AI infrastructure, added CPU capacity and absorbed higher chip component prices.
48.4 billion yuan in AI cloud and compute revenue, up 45%, showed customer demand strengthening as the company pushes Qwen models and agentic AI services.
Shares of Alibaba fell more than 3% in U.S. trading, while CEO Eddie Wu said added supply should accelerate AI and cloud growth and improve profitability in coming quarters.
380 billion yuan is the company's three-year AI and cloud infrastructure commitment, part of a broader goal to top $100 billion in annual AI and cloud revenue within five years.