Alibaba Cloud is making a strong comeback, posting a 6% year-over-year revenue increase for the quarter ending June 30. The company generated RMB 26.5 billion ($3.65 billion), marking its best performance since September 2022. This growth is largely due to a sharp focus on AI technology.
CEO Eddie Wu emphasized AI’s key role in boosting the company’s cloud business. Their AI products achieved triple-digit growth, with the user base for their AI platform more than doubling quarter-over-quarter. “AI-related product revenue is now driving a bigger share of our public cloud income,” Wu stated. Alibaba Cloud’s future is clearly tied to its AI offerings.
While 6% growth might seem modest, it represents a significant shift for Alibaba Cloud, which has been battling a slowdown in recent quarters. Wu remains optimistic about the future, expecting the cloud division to achieve double-digit growth in the second half of the fiscal year, largely driven by AI. He projects that more than 50% of this growth will come from AI-related products.
However, Alibaba Cloud faces its own challenges. The global cloud market is fiercely competitive, with giants like Amazon Web Services, Microsoft Azure, and Google Cloud holding strong positions. Additionally, Alibaba must navigate legal obstacles as AI technology faces increasing scrutiny worldwide. Overcoming these hurdles will be crucial for Alibaba Cloud’s continued development.
Despite these challenges, Alibaba is rock-solid in its commitment to AI. Wu mentioned that the company is focused on becoming a leader in AI-driven cloud services, aiming not just for success but for longevity. This move aligns with Alibaba’s broader strategy to refocus on its core operations in e-commerce and cloud computing. In the bigger picture, Alibaba Group’s overall revenue rose by 4% to RMB 243.2 billion ($34 billion), though operating profits fell by 29%. Among these mixed results, Alibaba Cloud—especially in terms of AI output—stands out as a bright spot in the company’s ongoing transformation.
