Alibaba Group CFO: AI-related product revenue achieving triple-digit growth for the eighth consecutive quarter

Alibaba Group CFO: AI-related product revenue achieving triple-digit growth for the eighth consecutive quarter

Alibaba Group Holding Limited (BABA) has reported significant growth in its AI-related product revenues, marking the eighth consecutive quarter of triple-digit growth. This remarkable performance is driven by innovations such as the Lingma AI coding assistant and the Qwen3 models, which are gaining traction among developers worldwide. The Cloud Intelligence Group's revenues increased by 18% year-over-year in the fourth quarter of fiscal 2025, further cementing Alibaba's leadership in next-generation AI solutions [1].

Alibaba has announced plans to invest RMB 380 billion ($53 billion) over the next three years in AI and cloud infrastructure. This substantial investment will focus on areas such as chips, servers, data centers, and advanced AI technologies, reinforcing the backbone of its cloud business [1]. The company's open-sourcing strategy, as seen with the ModelScope and Hugging Face platforms, has contributed to over 300 million downloads and 100,000 derivative models worldwide, accelerating innovation in various industries [1].

However, Alibaba faces significant challenges, including resistance to paid AI subscriptions in China, which has led to a substantial reduction in API pricing by up to 97%. This move, while increasing usage, has limited monetization potential [1]. Additionally, intense competition from open-source rivals and global cloud giants continues to erode pricing power in the enterprise API market, raising concerns about profitability and the sustainability of heavy infrastructure investments [1].

Despite these headwinds, Alibaba's AI product momentum reflects a clear strategic vision. The company's Chief Financial Officer, Toby Xu, emphasized the strong growth of customer management revenue and Cloud Intelligence Group revenues, which grew 26% year-over-year. AI-related product revenue achieved triple-digit growth for the eighth consecutive quarter, indicating Alibaba's commitment to AI and cloud initiatives [2].

Alibaba's competitors, such as Microsoft and Amazon, continue to pose significant challenges. Microsoft's Azure platform has shown robust growth and strong enterprise trust, while Amazon's AWS remains a dominant force in the AI and cloud market [1]. Alibaba's ability to translate its AI product momentum into long-term success will be critical in an increasingly competitive landscape.

References:
[1] https://finance.yahoo.com/news/ai-boom-alibaba-product-momentum-150200568.html
[2] https://finance.yahoo.com/news/alibaba-group-announces-june-quarter-093400958.html