Key Takeaways
- Alibaba’s Q3 revenue grew 5% to ¥247.8 billion ($35B), beating expectations
- Qwen AI app hit 10 million downloads in first week, driving cloud revenue up 34%
- Net profit fell 52% to ¥21 billion due to heavy AI infrastructure investments
Alibaba reported stronger September quarter results, powered by the blockbuster launch of its Qwen AI chatbot and accelerating cloud business growth. The Chinese tech giant’s revenue rose 5% year-on-year to 247.8 billion yuan ($35 billion), surpassing analyst forecasts.
AI Investment Drives Growth
CEO Eddie Wu confirmed the company is deepening its artificial intelligence push, stating: “We have entered into an investment phase to build long-term strategic value in AI technologies and infrastructure.” The Cloud Intelligence Group revenue surged 34% to 39.8 billion yuan, with AI-related products recording triple-digit growth for the ninth consecutive quarter.
Alibaba has invested approximately 120 billion yuan in AI and cloud infrastructure over the past four quarters, supplementing its previously announced 380-billion-yuan commitment over three years.
Qwen’s Record-Breaking Launch
The Qwen AI chatbot, competing with DeepSeek and OpenAI’s ChatGPT, achieved 10 million downloads within its first week of launch. This milestone sent Alibaba’s US-listed shares climbing, with the stock closing 5% higher following the announcement.
Analysts from China Merchants Securities noted the launch was “supported by Alibaba’s prolonged investment and cutting-edge capabilities in foundational models.” Proactive Investors’ Emily Jarvie described Qwen as “one of the fastest-growing AI apps in China.”
Market Performance and Challenges
Despite the 52% drop in net income to 21 billion yuan, Alibaba’s US-listed shares have rallied nearly 90% over the past year, defying global concerns about AI stock valuations. The profit decline reflects substantial investments in emerging business lines like instant commerce.
The company recently faced allegations in a Financial Times report about providing technology support and user data to Chinese authorities and the military. An Alibaba spokesperson told AFP that “the assertions and innuendos in the article are completely false.”
Through continued investment in AI models, chips, and computational infrastructure, Alibaba is positioning itself as a major contender in the global artificial intelligence race.
