Alibaba Expects AI Revenue to Hit $4.42 Billion by Year’s End

Alibaba Group Holding expects its annualised recurring revenue from AI models and applications to hit 30 billion yuan (US$4.42 billion) by the year’s end, as the company ramps up its AI commitment. AI products are projected to generate more than 50 per cent of Alibaba’s cloud-computing revenue within the next year, as the tech giant looks to step up its AI monetisation efforts. Alibaba CEO Eddie Wu Yongming said the company was likely to “overshoot” the original capital-expenditure target of 380 billion yuan, citing the massive investment required for the buildout of AI data centres. The company on Wednesday disclosed quarterly revenue of AI-related products for the first time, reporting that the segment has registered triple-digit growth for an eleventh consecutive quarter. The surge helped bolster a 3 per cent overall revenue increase that was largely in line with market expectations. AI-related product revenue hit 8.97 billion yuan, the company said in a filing to the Hong Kong stock exchange, as the segment continues to show strong momentum. US-listed shares of the Hangzhou-based e-commerce and AI giant surged as much as 6 per cent in early Wednesday trading. The rally followed management’s first-time disclosure of specific AI-revenue figures, which helped offset a 3 per cent overall quarterly revenue increase that arrived largely in line with market expectations.