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AINews|August 23, 2026, 04:40 PM
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Alibaba AI Cloud Revenue Jumps 45 Percent as Profit Beats Forecasts

BySendTech Times AI & Enterprise DeskNewsroom-edited, source-reviewed coverage
Newsroom brief

Alibaba's cloud and AI division grew revenue 45 percent in the June quarter, while segment margin improved and executives tied AI computing investments to a two- to three-year break-even claim.

Verified against source materialEdited by SendTech Times AI & Enterprise DeskSource: South China Morning Post
Alibaba AI Cloud Revenue Jumps 45 Percent as Profit Beats Forecasts
Image source: South China Morning Post

Alibaba's cloud and artificial intelligence division grew revenue 45 percent in the June quarter, the South China Morning Post reported, giving the company faster earnings momentum while it spends heavily on AI computing capacity.

The result puts Alibaba's AI infrastructure buildout inside a near-term profitability test.

Adjusted profit reached 27.3 billion yuan, or $4 billion, above expectations, while the group used the quarter to argue that higher compute spending can be absorbed as cloud margins improve.

AI Cloud And Compute Services Sets The Pace

AI Cloud and Compute Services, the reporting segment that includes Alibaba's cloud business and T-Head chip arm, booked 48.4 billion yuan for the June-quarter reporting period.

That marked the unit's fastest growth rate in 22 quarters.

Adjusted Ebita in the segment rose 133 percent to 5.6 billion yuan.

The margin rose to 11.6 percent from 7.2 percent a year earlier, giving Alibaba more earnings headroom for AI infrastructure spending.

AI-related product revenue kept triple-digit growth for a 12th consecutive quarter.

The line reached 12.4 billion yuan, up from 8.97 billion yuan in the previous quarter, giving investors a more specific view of demand inside the broader cloud segment.

Compute Spending Carries A Break-Even Claim

Alibaba executives told investors on an earnings call that AI computing investments should break even within three years, or possibly two if gross margins continue to rise.

That claim ties the spending cycle to operating performance rather than only to market share or model capability.

The group total also improved.

Revenue rose 9 percent year on year to 269 billion yuan, near Bloomberg consensus of 268.5 billion yuan and faster than the 3 percent growth recorded in the previous quarter.

The quarter does not settle how much capacity Alibaba must keep adding as Chinese cloud buyers shift more work toward AI products.

The next measurable proof is whether the AI product line can keep growing while segment margin stays above last year's level.

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