Alibaba Group reported a sharp decline in core profitability for the March quarter as the company continued to invest heavily in artificial intelligence, cloud computing and e-commerce expansion.
The Chinese technology giant said adjusted earnings before interest, taxes and amortization fell 84 percent year-over-year to about $750.9 million.
Alibaba’s US-listed shares rose early in premarket trading and then fell, falling as much as 4 percent.
Despite weak profitability, the company reported strong growth in its AI and cloud businesses. Revenue at Alibaba’s cloud computing division rose 38 percent year-on-year to 41.6 billion yuan, while adjusted profit for the segment rose 57 percent.
Chief Financial Officer Toby Xu said: “Our strategic investments continued to translate into business growth. Cloud Intelligence Group’s revenue continued to accelerate, with AI-related product revenue achieving triple-digit growth for the eleventh consecutive quarter.”
Alibaba said AI-related revenue reached 9 billion yuan during the quarter.
Chief Executive Eddie Wu said the company expects annual recurring revenue from AI models and applications to exceed 30 billion yuan by the end of the year.
Alibaba has also expanded AI integration on its platforms, including launching a new Quon-powered shopping assistant for Taobao users.
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