Artificial intelligence represents a rapidly growing share of… Alibaba GroupRevenues, and will generate a return on the company’s significant investment in AI infrastructure, CEO Eddie Wu He said Wednesday (May 13).
Speaking during the company’s earnings call for the quarter ending March 31, Wu said that AI-related product revenue now represents 30% of Cloud Intelligence Group’s revenue and that it will account for more than 50% within about a year.
Alibaba Group’s Cloud Intelligence Group, which includes what it calls its “AI+Cloud” business, saw its revenue increase 40% year-on-year, according to the company. Presentation Released Wednesday.
“Given the certainty of long-term AI demand and our full technological advantages, we expect this trajectory to maintain strong growth in the medium to long term,” Wu said.
The group’s AI revenue has seen triple-digit growth for 11 consecutive quarters. This has brought AI product revenue to 30% of group revenue, according to the presentation.
“We are at a pivotal inflection point in the evolution from chatbots to autonomous AI agents, which is directly driving explosive growth across three core categories of workload: training, inference, and agent orchestration,” Wu said during the call. “Against this background, Alibaba’s AI has surpassed the initial investment stage and achieved large-scale commercial progress.”
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Amid this growth, Alibaba Group’s EBITDA fell 61% year-on-year, which the company said was primarily attributable to its investments in its technology, rapid commerce and user experience businesses, it said on Wednesday. Earnings release.
When an analyst asked him how the company’s management balances its heavy spending on artificial intelligence with stable profits, Wu compared it to investing in factories in order to benefit future manufacturing.
“We see that the ROI (return on investment) on this investment in the next three to five years is very clear,” Wu said.
Overall, during the quarter, Alibaba saw year-over-year revenue growth of 3%. When you compare revenue on a like-for-like basis, excluding revenue from two businesses sold by Alibaba (Sun Art and Intime), that number rises to 11%, according to the earnings release.
Alibaba’s two e-commerce companies, which it calls “consumer businesses,” have grown at a slower pace. Chinese e-commerce group Alibaba and international digital commerce group Alibaba saw revenue increase 6% year-on-year, according to the presentation.
Alibaba Group’s All Others segment saw its revenue decline 21% year-on-year. The company said the decline was primarily due to its sale of Sun Art and Intime.
