Alibaba Reports Strong Revenue Growth, Fueled by AI and E-Commerce

Beijing — Chinese tech giant Alibaba Group has posted its fastest revenue growth in over a year, surpassing analyst expectations as it capitalizes on the artificial intelligence (AI) boom and strong e-commerce demand.

For the quarter ending in December, Alibaba reported an 8% increase in revenue to 280.2 billion yuan ($38.38 billion), while net income soared to 48.9 billion yuan ($6.71 billion). The company’s New York-listed shares surged over 12% following the announcement.

Aggressive AI and Cloud Investment

In an earnings call, CEO Eddie Wu said Alibaba will “aggressively invest” in AI and cloud computing infrastructure over the next three years, with spending expected to exceed its total investment from the past decade.

“This quarter’s results demonstrated substantial progress in our ‘user-first, AI-driven’ strategies and the re-acceleration of our core businesses,” Wu said.

Wu reaffirmed Alibaba’s commitment to artificial general intelligence (AGI), a form of AI that can match or surpass human intelligence and learn independently. He called AGI a once-in-decades opportunity for industry transformation and positioned it as Alibaba’s primary focus.

China’s AI Race and Alibaba’s Competitive Edge

Alibaba’s push into AI comes as China intensifies its competition with the U.S. in the field. Chinese AI firm DeepSeek recently made waves by developing an AI model that rivals leading U.S. counterparts while using more affordable hardware.

Alibaba, headquartered in Hangzhou, is among China’s top firms vying for dominance in AI. In January, it launched its latest Qwen AI models, which ranked highly in industry benchmarks, reinforcing its position as a leader in the sector.

The company is also collaborating with Apple to integrate its AI technology into Chinese iPhones, marking a significant milestone in its AI expansion.

Cloud and E-Commerce Drive Growth

Alibaba’s cloud computing division saw a 13% revenue increase, its fastest growth in two years, as the company embeds AI into its cloud services.

Meanwhile, its international commerce unit, which includes AliExpress and Lazada, reported an impressive 32% revenue jump, driven by strong cross-border business performance.

Regulatory Revival and Market Confidence

Alibaba was one of several major Chinese tech firms hit by Beijing’s regulatory crackdown in 2020, which halted the initial public offering of its financial affiliate Ant Group and led to a record $2.8 billion antitrust fine. The crackdown also coincided with co-founder Jack Ma’s sudden disappearance from public view, sending Alibaba’s stock into a multi-year slump.

However, China’s approach to the tech sector appears to be shifting. President Xi Jinping recently held a private meeting with business leaders, including Ma, signaling a more supportive stance toward the industry.

These developments—combined with Alibaba’s AI expansion and DeepSeek’s advancements—have renewed investor confidence, pushing Chinese tech stocks higher in recent weeks.

Alibaba’s stock has surged more than 60% this year, with its U.S.-listed shares climbing 8.5% to $136.58 in morning trading.