{"id":647110,"date":"2026-08-20T11:02:14","date_gmt":"2026-08-20T11:02:14","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/647110\/"},"modified":"2026-08-20T11:02:14","modified_gmt":"2026-08-20T11:02:14","slug":"alibaba-shares-fall-as-ai-spending-drives-75-drop-in-net-income","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/647110\/","title":{"rendered":"Alibaba shares fall as AI spending drives 75% drop in net income"},"content":{"rendered":"

China’s Alibaba<\/a> on Thursday posted a 75% fall in profits for the June quarter as AI spending weighed on the tech giant’s results.<\/p>\n

Capital expenditure was up 75% to 67.7 billion Chinese yuan ($10 billion), primarily driven by uneven timing of customer purchases, an increase in CPU-compute capacity and higher prices across a broad range of chip components, the company said.<\/p>\n

Meanwhile, revenue rose 9% to 268.95 billion Chinese yuan, slightly higher than an LSEG estimate of 268.88 billion yuan.<\/p>\n

As the AI race accelerates, companies across the sector are increasingly contending with rising expenses for computing power and hardware. In March, the company reportedly<\/a> said it was raising prices for its AI computing and storage products by as much as 34% amid surging demand.<\/p>\n

Alibaba’s U.S. listed shares were volatile Thursday, initially falling 4% in premarket trading before paring losses. They were last down 1.6%.<\/p>\n

Stock Chart IconStock chart icon\"hide<\/p>\n

Alibaba’s U.S. listed shares year-to-date.<\/p>\n

Revenue at the tech giant’s key cloud division totaled 48.4 billion yuan, up 45% year-on-year. Alibaba’s cloud unit is seen as key to the company monetizing artificial intelligence, much like Microsoft<\/a> or Google<\/a>.<\/p>\n

AI-related product revenue delivered “triple-digit growth for the twelfth consecutive quarter,” CEO Eddie Wu said in a Thursday statement. “With our full\u2011stack AI strategy, we have put Alibaba in a superior position to capture the substantial growth of demand for artificial intelligence and AI compute,” he added.<\/p>\n

Competition heats up for AI models<\/p>\n

The Chinese tech giant operates across a wide range of industries, including chips, cloud infrastructure and models. Shares rallied earlier this month after Alibaba unveiled what it described as its “most powerful” AI model Qwen3.8-Max<\/a>. Alibaba shared results<\/a> showing it delivered comparable, or sometimes better, scores than Anthropic’s Fable 5.<\/p>\n

This month also saw Alibaba release an AI model that’s designed to run on consumer hardware like laptops \u2014 a new battleground for AI model developers. Qwen3.8-27B<\/a> has “excellent capabilities” in handling coding, professional work, research, and long-horizon agentic tasks, the company said at the time.<\/p>\n

Choose CNBC as your preferred source on Google and never miss a moment from the most trusted name in business news.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"China’s Alibaba on Thursday posted a 75% fall in profits for the June quarter as AI spending weighed…\n","protected":false},"author":2,"featured_media":647111,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[261],"tags":[291,23327,6565,289,290,48229,491,860,207,381,6738,18,158834,19,17,188,5762,82,384],"class_list":["post-647110","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-alibaba-group-holding-ltd","tag-alphabet-class-a","tag-artificial-intelligence","tag-artificialintelligence","tag-baidu-inc","tag-breaking-news-markets","tag-breaking-news-technology","tag-business-news","tag-china","tag-earnings","tag-eire","tag-europe-earnings","tag-ie","tag-ireland","tag-markets","tag-microsoft-corp","tag-technology","tag-united-states"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/117127503200449472","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/647110","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=647110"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/647110\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/647111"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=647110"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=647110"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=647110"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}