{"slug": "alibaba-quarterly-profit-drops-75-as-ai-investment-spending-grows", "title": "Alibaba quarterly profit drops 75% as AI investment spending grows", "summary": "Alibaba reported a 75% drop in quarterly profit to 10.5 billion yuan ($1.6 billion) for April-June, as capital expenditures on AI infrastructure jumped 75% to 67.7 billion yuan (about $10 billion). Revenue grew 9% to nearly 269 billion yuan ($40 billion), with AI cloud and compute revenue up 45% to 48.4 billion yuan ($7.2 billion). CEO Eddie Wu said AI and cloud revenue growth will accelerate as the company ramps up supply.", "body_md": "# Alibaba quarterly profit drops 75% as AI investment spending grows\n\n## China's Alibaba reports a 75% drop in profit for the latest quarter from the year before to roughly $1.6 billion as it invests heavily in AI infrastructure\n\n- Bookmark\n\nChina’s technology giant [Alibaba](/topic/alibaba) on Thursday reported a 75% drop in profit for the latest quarter as it invested big in artificial intelligence infrastructure, even as revenue coming from its AI-related services gained 45%.\n\nThe Hong Kong- and U.S.-listed company, which started out in e-commerce and online retail but is increasingly focused on AI technologies, said that its profit for April-June was at 10.5 billion yuan ($1.6 billion), down from 43.1 billion yuan ($6.4 billion) the same quarter last year.\n\nQuarterly revenue grew 9% to almost 269 billion yuan (nearly $40 billion), with revenue from its AI cloud and compute services up 45% to 48.4 billion yuan ($7.2 billion).\n\nBut capital expenditures, including investments in AI infrastructure to meet customer demand, jumped 75% to 67.7 billion yuan (about $10 billion) during the quarter, weighing on profits.\n\nAlibaba attributed the significant increase in spendings to factors including “fluctuations” in procurement cycles, increase in CPU, or central processing unit, compute capacity in anticipation of growing customer adoption of AI “agents” and higher pricing of chip components.\n\n“As we continue to ramp up our supply, our AI and Cloud revenue growth will accelerate further in the coming quarters, alongside continued improvement in profitability,” said Alibaba CEO Eddie Wu in prepared remarks during an earnings conference.\n\nAlibaba’s U.S.-traded shares fell more than 3% Thursday.\n\nAlibaba, one of China’s biggest companies, said last year it planned to invest at least 380 billion yuan (about $56 billion) over three years in cloud computing and AI infrastructure.\n\nIt has been making advances with its flagship Qwen AI and has launched “agentic” AI services for commercial customers. In July, it previewed its Qwen3.8-Max AI model which the company said was “second only” to Anthropic’s Claude Fable 5.\n\nIt has also pledged an ambitious goal of surpassing $100 billion in terms of annual AI and cloud revenue within the next five years.", "url": "https://wpnews.pro/news/alibaba-quarterly-profit-drops-75-as-ai-investment-spending-grows", "canonical_source": "https://www.independent.co.uk/news/alibaba-hong-kong-china-anthropic-b3036484.html", "published_at": "2026-08-20 15:05:43+00:00", "updated_at": "2026-08-20 15:14:59.487013+00:00", "lang": "en", "topics": ["artificial-intelligence", "ai-infrastructure", "ai-products"], "entities": ["Alibaba", "Eddie Wu", "Qwen", "Anthropic", "Claude Fable 5"], "alternates": {"html": "https://wpnews.pro/news/alibaba-quarterly-profit-drops-75-as-ai-investment-spending-grows", "markdown": "https://wpnews.pro/news/alibaba-quarterly-profit-drops-75-as-ai-investment-spending-grows.md", "text": "https://wpnews.pro/news/alibaba-quarterly-profit-drops-75-as-ai-investment-spending-grows.txt", "jsonld": "https://wpnews.pro/news/alibaba-quarterly-profit-drops-75-as-ai-investment-spending-grows.jsonld"}}