Chinese e-commerce behemoth Alibaba Group has delivered a robust performance for the September quarter, powered by the spectacular debut of its revamped Qwen artificial intelligence application and a significant acceleration in cloud-computing business revenue, even as net profit witnessed a substantial decline.
Quarterly Performance Exceeds Expectations
The technology major announced on Tuesday that its revenue for the three months ending September 30 climbed 5% year-on-year to reach 247.8 billion yuan (approximately $35 billion), surpassing analyst projections. This positive development emerged alongside a sharp 52% drop in net income attributable to ordinary shareholders, which settled at 21 billion yuan, reflecting the company's aggressive investment strategy and pressures from emerging business segments like instant commerce.
Alibaba's US-listed shares experienced an upward trajectory following the revelation that Qwen, its newly launched AI chatbot competing directly with DeepSeek and OpenAI's ChatGPT, achieved a remarkable milestone of crossing 10 million downloads within just one week of its introduction. The stock concluded Monday's trading session with a solid 5% gain after the Qwen achievement was disclosed.
Strategic AI Investments Paying Dividends
Chief Executive Officer Eddie Wu emphasized the company's intensified focus on artificial intelligence and associated infrastructure during the earnings announcement. "We have entered into an investment phase to build long-term strategic value in AI technologies and infrastructure," Wu stated, outlining the company's ambitious roadmap.
The Cloud Intelligence Group emerged as a standout performer, recording an impressive 34% revenue surge to 39.8 billion yuan. AI-related products within this division maintained their exceptional momentum, registering triple-digit growth for the ninth consecutive quarter, underscoring the successful execution of Alibaba's technology strategy.
Massive Financial Commitment to AI Infrastructure
Alibaba has demonstrated its serious intentions in the artificial intelligence arena through substantial capital allocation. Over the past four quarters, the company has deployed approximately 120 billion yuan toward AI and cloud infrastructure development. This investment comes in addition to the previously announced commitment of 380 billion yuan spread across three years, highlighting the scale of Alibaba's ambitions in the global technology landscape.
Industry analysts have recognized Qwen's early market traction as evidence of Alibaba's competitive edge within China, where ChatGPT remains inaccessible. China Merchants Securities analysts Crystal Li and Tommy Wong noted that the successful launch was "supported by Alibaba's prolonged investment and cutting-edge capabilities in foundational models."
Emily Jarvie from Proactive Investors highlighted that Qwen's rapid expansion makes it "one of the fastest-growing AI apps in China," signaling strong consumer acceptance and market potential.
Market Performance Defies Global Concerns
Alibaba's American depository receipts have demonstrated remarkable resilience, rallying nearly 90% over the past year, despite widespread apprehensions about potential overheating in artificial intelligence stocks globally. This performance indicates investor confidence in Alibaba's strategic direction and execution capabilities.
The company has recently faced increased scrutiny following a Financial Times report suggesting it provides technological support and user data to Chinese authorities and military organizations. An Alibaba spokesperson categorically denied these allegations, telling AFP that "the assertions and innuendos in the article are completely false."
Operating some of China's most prominent e-commerce and cloud platforms, Alibaba is strategically positioning itself as a formidable competitor in the worldwide artificial intelligence race through deepened investments in foundational models, semiconductor chips, and computational infrastructure.
