Alibaba's AI Business Soars

Alibaba Group's net profit experienced a 53% drop, landing at RMB20.99 billion, during its fiscal second quarter. This decline is attributed to intense competition within the food delivery sector. Despite the profit slump, revenue saw a steady increase, with the company's focus on AI development proving to be a significant growth driver.

The Cloud Intelligence Group within Alibaba saw revenue climb 34% to RMB39.8 billion, fueled by strong demand for AI-related products. Revenue from AI products has achieved triple-digit growth for nine consecutive quarters. Alibaba is strategically investing in AI technologies and infrastructure to build long-term value, with capital expenditure in these areas reaching approximately RMB120 billion over the past four quarters.

Alibaba is also making strides in the consumer AI market, demonstrated by the launch of the Qwen AI app, which reached 10 million downloads within a week. The company aims to integrate the app with other consumer services, creating a comprehensive AI agent. This strategic shift signifies Alibaba's focus on expanding its AI capabilities beyond cloud computing to directly engage consumers.