Alibaba Shares Jump Despite 84% EBITA Drop as AI Revenue Hits 9 Billion Yuan

3 articles · Updated · CNBC · May 13

Alibaba shares reversed an early 4% premarket drop and rose after executives told investors AI spending would deliver clear returns within three to five years.
5.1 billion yuan in adjusted EBITA for the March quarter marked an 84% year-on-year plunge, as Alibaba kept pouring money into AI infrastructure and quick-commerce expansion.
41.6 billion yuan in cloud revenue rose 38%, with segment EBITA up 57% and AI-related product revenue posting triple-digit growth for an 11th straight quarter.
9 billion yuan in AI-related revenue already booked, and CEO Eddie Wu said annualized recurring revenue from AI models and applications should top 10 billion yuan next quarter and 30 billion yuan by year-end.
380 billion yuan was Alibaba's prior three-year capex plan, but Wu said compute demand is now strong enough that spending over the next five years will exceed that level, underscoring a longer AI push.

Alibaba's profits crashed 84%. Is its multi-billion dollar AI bet a genius move or a desperate gamble?

With US chip sanctions in place, can Alibaba's huge AI investment create Asia's new tech kingpin?