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China\u2019s Alibaba said that growth accelerated for both its artificial intelligence and cloud businesses in the latest quarter, driven by the AI boom, even though overall revenue rose just 3% to 243 billion yuan ($36 billion).<\/p>\n
Revenue from its Cloud Intelligence Group, which focuses on cloud computing and AI developments, jumped 38% in the January-March quarter from a year ago to 41.6 billion yuan ($6.1 billion). That was faster than the 36% and\u00a034%<\/a>\u00a0growth in the previous two quarters, respectively.<\/p>\n However, Alibaba recorded an overall 848 million yuan ($125 million) loss from operations for the quarter, a key measure of profitability of its core operating businesses, which was down sharply from a 28.5 billion yuan gain the same period last year.<\/p>\n Growing technological investment was one of the main reasons for rising expenses that weighed on profitability, as technology companies globally\u00a0race to invest<\/a>\u00a0to boost infrastructure in supporting the ballooning AI demand.<\/p>\n The Hangzhou-based company, which has about 130,000 employees, last year pledged investments of at least 380 billion yuan over three years in cloud computing and AI infrastructure.<\/p>\n This week, Alibaba said it has fully connected its flagship Qwen AI app to its e-commerce platform Taobao, allowing users to \u201cbrowse, compare, place orders, and manage deliveries through natural conversation\u201d in hopes of driving up demand. It launched its \u201cagentic\u201d AI tool Wukong in March in expanding its products for commercial customers, and raised prices for some AI services.<\/p>\n \u201cAlibaba\u2019s AI has moved beyond the initial investment phase and progressed to commercialization at scale,\u201d said CEO Eddie Wu on Wednesday in prepared remarks during an earnings call.<\/p>\n Alibaba\u2019s U.S.-traded shares jumped more than 7% after Wednesday’s results announcement.<\/p>\n Many technology companies are now facing the challenge of boosting\u00a0AI-related<\/a>\u00a0revenue and proving that the huge investment costs can pay off. For Alibaba, \u201cwe should expect AI-related growth to accelerate further,\u201d said Jacob Cooke, CEO of Beijing-based consultancy WPIC Marketing + Technologies.<\/p>\n