Alibaba has once again sent a heavy signal in investing in the construction of cloud and AI hardware infrastructure.
On February 24th, Alibaba Group CEO Wu Yongming announced that over the next three years, Alibaba will invest more than 380 billion yuan in building cloud and AI hardware infrastructure, exceeding the total amount of the past decade. This also sets a record for the largest investment in cloud and AI hardware infrastructure construction by Chinese private enterprises in history.
Investing in the future
Alibaba’s investment occurred after two important moments. One is the outbreak of the domestic AI industry; The second is the convening of a symposium for private enterprises. Wu Yongming said, “The explosion of AI far exceeds expectations, and the domestic technology industry is thriving with enormous potential. Alibaba will spare no effort to accelerate the construction of cloud and AI hardware infrastructure, and promote the development of the entire industry ecosystem. ”
Currently, Alibaba Cloud is the leading cloud computing company in Asia, and the Alibaba Tongyi Qianwen Big Model has become one of the world’s top open-source models. Continuing to invest a huge amount of 380 billion yuan can greatly boost confidence in related industries, while also indicating that Alibaba continues to believe in and invest in the future.
Increase investment in the three major AI fields
On the evening of February 20, Wu Yongming, CEO of Alibaba Group, said on the telephone conference of financial analysts in the third quarter of fiscal year 2025 that Alibaba would continue to focus on three business types in the future: domestic and foreign e-commerce business, AI+cloud computing technology business, and Internet platform products.
Wu Yongming stated that in the next three years, Alibaba will increase investment in three major AI fields:
Firstly, invest in the infrastructure construction of AI and cloud computing. The AI era has a clear and huge demand for infrastructure, and we will actively invest in AI infrastructure construction. In the next three years, the investment in cloud and AI infrastructure is expected to exceed the total of the past decade.
Secondly, invest in AI basic model platforms and AI native applications. The AI basic model is of great significance to the transformation of industrial productivity. It will significantly increase the R&D investment in AI basic models, ensure the progressiveness technology and industry leadership, and promote the development of AI native applications.
Thirdly, invest in AI transformation and upgrading of existing businesses. For e-commerce and other Internet platform businesses, AI technology upgrading will bring huge opportunities for improving user value, so we will continue to increase the investment in research and development and computing power of AI applications, use AI technology to deeply transform and upgrade businesses, and grasp new development opportunities in the AI era.
We are confident in our development strategy focusing on e-commerce and ‘AI+cloud’, and also look forward to the business opportunities brought by the new technology cycle. ”Wu Yongming said.
In addition, Wu Yongming also revealed that Alibaba will release a deep inference model based on Qwen2.5-Max in the near future.
With the rapid application of AI technology in various industries, customer demand for Alibaba Cloud products is rapidly increasing, and Alibaba Cloud’s revenue is in a stage of growth enhancement. Alibaba has opened up a new generation of multimodal model Qwen2.5-VL and launched its flagship model Qwen2.5-Max based on MoE architecture, which is at the forefront of the industry in multiple authoritative benchmark evaluations. As of the end of January, Tongyi Qianwen’s global derivative models have exceeded 90000, ranking first among mainstream organizations.
Over the past year, Alibaba has continued to invest in AI infrastructure construction, and Alibaba Cloud’s external commercialization revenue has returned to double-digit growth. AI related product revenue has achieved triple digit year-on-year growth for six consecutive months.
Latest financial report
Just last week, Alibaba Group released its financial performance for the third quarter of fiscal year 2025 (ending on December 31, 2024), showing a revenue of RMB 280.15 billion, a year-on-year increase of 8%, and an estimated RMB 277.37 billion; Adjusted EBITDA for the third quarter was RMB 62.05 billion. The net profit attributable to common shareholders is RMB 48.945 billion. The net profit was RMB 46.434 billion, a year-on-year increase of 333%. Diluted earnings per American Depositary Share of RMB 20.39 and diluted earnings per share of RMB 2.55. The non GAAP diluted earnings per American Depositary Share were RMB 21.39, a year-on-year increase of 13%.
In addition, during the quarter, e-commerce business growth accelerated, Alibaba Cloud’s commercial revenue returned to double-digit growth, and AI related product revenue maintained triple digit growth for six consecutive quarters.
It is worth noting that Alibaba significantly increased its capital expenditures in the third quarter of fiscal year 2025. The financial report shows that the company’s capital expenditure reached RMB 31.8 billion, a significant increase of 80% compared to the previous period.
