Alibaba's profit sinks 75% as it doubles down on AI, then raises $10.2B more to spend
Questions this post answers
Why did Alibaba's profit drop 75% even though cloud revenue grew?
Alibaba's net profit fell 75% to $1.54 billion in the June quarter because AI capital expenditure hit $9.98 billion, up 75% year over year, while the new AI Labs and Applications unit housing Qwen lost $2.04 billion. A €550 million EU fine against AliExpress and a $657 million goodwill impairment added further pressure, even as cloud revenue grew 45%, its fastest pace in 22 quarters. Track how AI infrastructure spending reshapes tech earnings by following cloud and AI capex trends on daily.dev.
How much money is Alibaba raising for AI and what is it for?
Alibaba is raising HK$80 billion, about $10.2 billion, through a Hong Kong share placement, with every dollar of net proceeds earmarked for AI infrastructure expansion and full-stack AI capabilities. If completed, it will be the largest primary follow-on offering ever by a Hong Kong-listed company and the largest Regulation S equity offering on record. Developers evaluating cloud providers can watch how this AI capital raise shapes Alibaba Cloud's roadmap on daily.dev.
What is Alibaba's revenue target for its cloud and AI business?
Alibaba wants to reach $100 billion in combined cloud and AI revenue within five years. Cloud and AI revenue already reached 48.44 billion yuan for the quarter, and AI model services alone are generating over 16 billion yuan in annual recurring revenue, supported by its Qwen models, cloud infrastructure, and proprietary AI chips. Anyone comparing cloud and AI platforms can follow Alibaba Cloud's growth trajectory on daily.dev.