Alibaba's April-June Quarter Profit Falls 75% as AI Investment Burden Weighs

Earnings
โดย 東洋経済オンライン·CN·Read original
Summary · why it matters

Chinese e-commerce giant Alibaba announced its April-June quarter results on August 20, with net profit plunging 75% year-on-year to 10.444 billion yuan, weighed down by heavy upfront investments in AI and other tech sectors. Revenue rose 9% to 268.953 billion yuan, slightly beating market expectations, but capital expenditure surged 75% to 67.678 billion yuan, pressuring profits. Alibaba underwent an organizational restructuring, with the "AI Cloud Computing Services" division, which integrates cloud business and AI semiconductors, posting a strong 45% revenue growth, while the division centered on its AI service "Qianwen" grew only 16%, highlighting the difficulty of monetization. Similarly, Tencent's April-June quarter net profit remained nearly flat at 56 billion yuan, dragged down by AI application development costs. In contrast, memory chip maker ChangXin Memory Technologies saw its January-March quarter net profit surge to 24.7 billion yuan, and shortly after its listing, it jumped to the top of China's listed companies by market capitalization. Only AI infrastructure businesses are profitable, while AI's own revenue contribution remains a distant prospect.

Impact on stocks 2

Artificial Intelligence▼ · 2 stocks
Alibaba Group Holding Ltd
9988
▼ NegativeCapitalDemandrelevance

Alibaba's April-June net profit plunged 75% as capex surged 75% on heavy upfront AI investment.

Tencent Holdings Ltd
0700
▼ NegativeCapitalrelevance

Tencent's April-June net profit stayed nearly flat at 56 billion yuan, dragged down by AI application development costs.

Theme Impact 4

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