Alibaba profit falls 75% as AI spending surges, cloud revenue jumps 45%

Alibaba reported a 75% drop in June-quarter profit as a costly push into artificial intelligence offset stronger sales from its cloud business. Revenue rose 9% to 268.95 billion yuan, roughly in line with analyst estimates, while net income fell to 10.5 billion yuan. Cloud revenue reached 48.4 billion yuan, up 45% from a year earlier, helped by demand for AI computing capacity. Capital expenditure jumped 75% to 67.7 billion yuan as the Hangzhou-based company spent more on chips and computing infrastructure. The results underscore Alibaba's strategy under CEO Eddie Wu to prioritize AI and cloud growth even as investors press Chinese tech companies to show returns on heavy spending.