Alibaba's AI Spend Hits Profit Before Payoff
Alibaba's net income fell 75% as capital spending on AI jumped 75%. Revenue still rose 9%, and cloud accelerated to 45% growth. The paradox is China's tech spend in one print: the five-year plan demands the racks; the ADR market wants the payoff first.
libaba's net income fell 75 percent as capital spending on AI jumped 75 percent. That rhyme is the print. For the quarter ended June 30, profit dropped to about 10.5 billion yuan from 43.1 billion a year earlier. Revenue still rose 9 percent, to 268.95 billion yuan, a hair above the LSEG consensus. U.S.-listed shares sold off as much as 4 percent. The cloud grew. The P&L did not. Cloud Intelligence — Alibaba's AI and compute sleeve — accelerated to 45 percent growth, 48.44 billion yuan. AI-related product revenue posted a twelfth consecutive quarter of triple-digit gains. CEO Eddie Wu called it commercialization of a full-stack. The ADR market called it an invoice. Beijing Wants Racks. The Tape Wants a Register.
Continue reading →