E-commerce giant Alibaba Group Holding expects to stay ahead of its Chinese Big Tech peers in artificial intelligence-related capital expenditure, as the firm’s AI and cloud computing unit posted its fourth consecutive quarter of double-digit revenue growth.
Alibaba Cloud on Tuesday reported a 34 per cent year-on-year revenue growth to 39.8 billion yuan (US$5.6 billion) in the three months ended September 30, as the Hangzhou-based parent’s overall revenue in its financial second quarter reached 247.8 billion yuan. Alibaba owns the South China Morning Post.
The AI unit’s level of revenue growth in the September quarter aligned with those of its US peers – Microsoft’s Azure and Google Cloud – which posted 40 per cent and 33.5 per cent gains, respectively, according to a research note by Jefferies equity analyst Thomas Chong.
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“High level of growth [for Alibaba Cloud] is expected in the December quarter,” Chong said. “After more than 40 companies reported earnings, Jefferies reaffirms its 2026 outlook that AI would continue to shine with multiple catalysts ahead.”
In his post-earnings call with analysts on Tuesday, Alibaba CEO Eddie Wu Yongming, who also serves as Alibaba Cloud’s chairman, said the strong demand for AI could lead the company to boost investment in AI infrastructure.
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Earlier this year, Alibaba committed US$52 billion in capital spending for computing resources and AI infrastructure – China’s largest-ever computing project financed by a single private business.