---
format: "aidr-story-markdown/v1"
id: "22d39ad353c883d9bf180a714536c44c85fb72e004932e58f06f00cea3b23517"
canonical_url: "https://aidr.today/22d39ad3?lang=en"
title: "Alibaba Profit Plunges 75% to Fuel 12 Quarter AI Growth Streak"
lang: "en"
requested_lang: "en"
available_langs: ["en","vi"]
translation_fallback: null
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published_at: "2026-08-20T11:48:24.000Z"
category: "Industry"
topics: ["alibaba","qwen","funding","chips"]
source_urls: ["https://huggingnews.com/earnings/alibaba-profit-plunges-75percent-to-fuel-12-quarter-ai-growth-streak-4a7f3444","https://x.com/AlphaSenseInc/status/2090389488589476285","https://x.com/wallstengine/status/2090374144336806309","https://x.com/CNBC/status/2090393427808555456","https://x.com/poezhao0605/status/2090389719427530920"]
summary: "Capital expenditure rose to RMB 67.7 billion in the quarter ending June, driven by increased CPU compute capacity and higher prices for chip components. The spending contributed to a 75% drop in net income to RMB 10.4 billion, though revenue increased 9% to RMB 268.95 billion (US$39.64 billion). Non-GAAP diluted earnings per ADS fell 42% to RMB 8.52. Alibaba's cloud segment EBITA increased 133% to RMB 5.6 billion, while the AI Labs and Applications segment recorded a loss of RMB 13.9 billion due to Qwen app inference costs. CEO Eddie Wu said the company's full-stack AI strategy positions the business to capture rising demand for compute, noting that AI-related product revenue has grown at triple digits for 12 straight quarters. The company also reported approximately 64 million 88VIP members."
---

# Alibaba Profit Plunges 75% to Fuel 12 Quarter AI Growth Streak

> [Open the canonical story](<https://aidr.today/22d39ad3?lang=en>)

**Published:** 2026-08-20T11:48:24.000Z
**Category:** Industry
**Topics:** alibaba, qwen, funding, chips

## Summary

Capital expenditure rose to RMB 67\.7 billion in the quarter ending June, driven by increased CPU compute capacity and higher prices for chip components\. The spending contributed to a 75% drop in net income to RMB 10\.4 billion, though revenue increased 9% to RMB 268\.95 billion \(US$39\.64 billion\)\. Non\-GAAP diluted earnings per ADS fell 42% to RMB 8\.52\. Alibaba's cloud segment EBITA increased 133% to RMB 5\.6 billion, while the AI Labs and Applications segment recorded a loss of RMB 13\.9 billion due to Qwen app inference costs\. CEO Eddie Wu said the company's full\-stack AI strategy positions the business to capture rising demand for compute, noting that AI\-related product revenue has grown at triple digits for 12 straight quarters\. The company also reported approximately 64 million 88VIP members\.

## Sources

- [Story source](<https://huggingnews.com/earnings/alibaba-profit-plunges-75percent-to-fuel-12-quarter-ai-growth-streak-4a7f3444>)
- [Story source](<https://x.com/AlphaSenseInc/status/2090389488589476285>)
- [Supporting source](<https://x.com/wallstengine/status/2090374144336806309>)
- [Supporting source](<https://x.com/CNBC/status/2090393427808555456>)
- [Supporting source](<https://x.com/poezhao0605/status/2090389719427530920>)