Alibaba Discloses AI Product Annualized Revenue Exceeds RMB 49.5 Billion; Cloud Growth Accelerates to 45%

On August 20, Alibaba Group disclosed at its earnings call that annualized revenue from AI-related products surpassed RMB 49.5 billion as of the current quarter, accounting for 35% of Alibaba Cloud's external commercialization revenue. The gross margin of AI-related products is significantly higher than the cloud product average, and revenue has achieved triple-digit year-on-year growth for the 12th consecutive quarter. In the quarter ended June, Alibaba Cloud revenue grew 45% year-on-year, accelerating further from the prior quarter, while the cloud business EBITA margin rose to 12% quarter-on-quarter.

Supernode instances based on the next-generation Pingtouge chip Zhenwu M890 have been launched on Alibaba Cloud and entered scaled commercialization, with volumes expected to continue expanding in the second half of the year. As of early August, the Zhenwu chip has served more than 650 customers, and Pingtouge has established a full-stack self-developed chip portfolio covering GPUs, CPUs, and network chips. The supernode can run inference for large models with over 2 trillion parameters, and both Kimi K3 and Qwen 3.8 Max are already being served through these instances. Alibaba Cloud's large AI data center delivery cycle has been shortened to 100 days.

As of the end of the June 2026 quarter, the group had invested approximately RMB 190 billion cumulatively under the three-year RMB 380 billion investment plan announced in February 2025. Alibaba Cloud's capital expenditure reached RMB 67.7 billion in the quarter, partly due to increased CPU procurement and higher chip component prices. Chief Financial Officer Xu Hong said AI commercialization is built on infrastructure such as computing centers, and capital expenditure must be invested in advance. The V100 chips purchased in 2018 and A100 chips purchased in 2020 remain near full utilization, indicating that the actual service life of AI computing assets is significantly longer than the theoretical depreciation period.