Beijing [China], May 14: Chinese tech giant Alibaba said Wednesday that net profit dropped by nearly a fifth during its most recent fiscal year, weighed by challenges in the domestic economy and an expensive push into artificial intelligence. Alibaba, which runs some of China's biggest online shopping platforms, has seen its core e-commerce business squeezed by price wars and sluggish consumption in the world's second-largest economy.The Hangzhou-based firm is ploughing tens of billions of dollars into AI, with its shareholders keen to see how the company will approach the tricky task of monetising these huge investments.
For the year ended March 31, Alibaba recorded a net profit of 105.9 billion yuan ($15.6 billion), a statement at the Hong Kong Stock Exchange said, down from 129.5 billion in the previous fiscal year. That figure represented a year-on-year drop of 18 percent. During the final financial quarter, revenue grew by three percent year-on-year to 243.4 billion yuan, the statement said.
"Alibaba's full-stack AI investments have progressed from incubation to commercialisation at scale," CEO Eddie Wu was quoted as saying in the statement. During the most recent quarter, the firm "achieved accelerated breakthroughs across models, cloud infrastructure, and applications", Wu said.
Alibaba's open-source Qwen AI models are popular with programmers worldwide. This week, the tech behemoth said it had integrated Qwen's agentic features-which can carry out tasks for users-across its hugely popular Taobao shopping app in China. Wu said in Wednesday's statement that Alibaba sees "massive potential for agentic AI".Bloomberg Intelligence analysts had said ahead of the earnings results that Alibaba "is likely to lean even harder into AI integration across its ecosystem in fiscal 2027". The company will keep "expenditure high to spur user adoption", they said.
Alibaba, along with fellow Chinese tech titan Tencent, is reportedly in talks to invest in top AI startup DeepSeek, which in April released a long-awaited major new artificial intelligence model. AFP had no immediate response from Alibaba on the reports, which said DeepSeek's funding round could value it at as much as $50 billion.
Meanwhile Alibaba's own AI offerings have been attracting attention for their high quality, with its "HappyHorse" video generator topping benchmarks when it was released in April.
Source: Qatar Tribune
