Alibaba's Revenue Growth Driven by Artificial Intelligence and E-Commerce

Alibaba Group Holding, a major Chinese e-commerce company, reported its highest revenue growth in over a year, surpassing market expectations largely due to the ongoing boom in artificial intelligence (AI) in China.

For the quarter ending in December, Alibaba announced an 8% increase in revenue, reaching 280.2 billion yuan (approximately $38.38 billion) compared to the same quarter last year.

Net income saw a significant rise, amounting to 48.9 billion yuan (around $6.71 billion). Following the release of these earnings figures, Alibaba's stock traded in New York rose more than 12%.

During an earnings call, CEO Eddie Wu emphasized that the company intends to "aggressively invest" in AI and cloud computing over the next three years, with projections indicating that upcoming investments will surpass the total made in the last decade.

"This quarter's results show considerable progress in our 'user first, AI-driven' strategies and the revitalized growth of our core businesses," said Wu.

He elaborated on Alibaba's ambition to develop artificial general intelligence (AGI), a form of AI capable of performing tasks and learning as effectively as humans. Wu noted that the opportunity for such transformative technology is rare, occurring only once every few decades, making AGI Alibaba's primary focus.

Alibaba's ambitious plans come as competition in the AI sector intensifies between the U.S. and China. For instance, Chinese AI company DeepSeek has made headlines for releasing an AI model that competes with offerings from leading U.S. firms while utilizing more affordable training hardware.

Based in Hangzhou, Alibaba is among numerous Chinese tech firms striving to claim a leading position in the AI domain. In January, Alibaba unveiled its latest Qwen AI models, which performed impressively in benchmark tests, further asserting the company's standing in China's competitive AI landscape.

In addition, Alibaba has collaborated with Apple to integrate its AI technologies into Chinese iPhones, enhancing the product's capabilities.

AI technology is already being integrated into Alibaba's cloud offerings, which reported a 13% rise in revenue compared to last year—the fastest growth rate in nearly two years. Furthermore, the international commerce segment, which includes platforms like AliExpress and Lazada, achieved a 32% increase in revenue, fueled by robust performance in cross-border businesses.

Previously, Alibaba faced challenges due to a regulatory crackdown on the tech industry in 2020. This action included halting the initial public offering of its financial arm, Ant Group, and a hefty $2.8 billion fine for anti-monopoly violations. Co-founder Jack Ma became notably absent from the public eye, leading to a prolonged decline in the company's stock prices.

However, recent shifts in Beijing's approach toward the tech industry—promoting technological supremacy and independence—have sparked renewed optimism. This change in sentiment was highlighted during a recent private gathering with notable entrepreneurs, including Ma, attended by President Xi Jinping.

These developments, along with advancements from DeepSeek, have rekindled interest in the Chinese technology sector, propelling technology stocks upward in recent weeks.

As a result, Alibaba's stock has surged over 60% this year, with shares listed in the U.S. climbing 8.5% during morning trading, reaching $136.58.

Alibaba, business, revenue