Alibaba is making a major push into artificial intelligence (AI) and cloud computing, signaling its ambition to dominate China’s tech industry. The e-commerce giant announced plans to significantly increase its investment in AI after reporting better-than-expected third-quarter revenue.
Strong Q3 Performance Fuels Expansion
On Thursday, Alibaba revealed its revenue for the December quarter reached 280.15 billion yuan ($38.58 billion), slightly surpassing analysts’ expectations of 279.34 billion yuan. The company’s U.S.-listed shares responded positively, jumping 11% in early trading.
A key driver of this growth was strong sales during China’s Singles’ Day shopping festival, which extended over a longer period this year. The event led to a 26.6% surge in e-commerce sales, boosting Alibaba’s domestic retail divisions—Taobao and Tmall—which saw a 5% revenue increase.
AI Takes Center Stage
Alibaba’s CEO, Eddie Wu, emphasized the transformative power of AI, calling it a “once-in-a-few-decades” opportunity. He announced plans to invest more in AI and cloud computing over the next three years than in the past decade, without specifying an exact amount.
“Alibaba’s AI strategy aims to push the boundaries of intelligence, with the potential to influence or even replace 50% of global GDP,” Wu stated.
Gaining Investor Confidence
Alibaba’s recent AI advancements have attracted investors, pushing its stock price 40% higher since the start of 2025. The company’s AI-powered cloud unit saw 13% revenue growth, reinforcing its position as a leader in China’s AI race.
Investor confidence was further boosted by the public reappearance of Jack Ma, Alibaba’s co-founder, at a meeting with President Xi Jinping. Photos of Ma shaking hands with Xi signaled strong government backing, reassuring investors about Alibaba’s future.
International Growth and Strategic Moves
Alibaba’s international e-commerce segment, which includes AliExpress, Alibaba.com, and other platforms, recorded an impressive 32% revenue growth.
To streamline operations, Alibaba merged its domestic and international e-commerce businesses into a single unit, the Alibaba E-commerce Business Group. The company has also offloaded non-core assets, including the sale of department store chain Intime at a $1.3 billion loss in December.
The AI Battle: Alibaba vs. DeepSeek
Alibaba recently unveiled Qwen 2.5, an upgraded version of its AI model, claiming it outperforms rival DeepSeek-V3. Additionally, the company announced a partnership with Apple to integrate its AI solutions into iPhones sold in China, further strengthening its market presence.
Final Thoughts
Alibaba’s aggressive AI and cloud investments, combined with strategic restructuring and international expansion, position it as a dominant force in China’s tech sector. As AI adoption accelerates, Alibaba’s ability to innovate and scale will determine its long-term success.
