Alibaba AI Adoption Drives 36% Cloud Growth

Alibaba Group saw growth across both its cloud and eCommerce segments during the quarter ended Dec. 31, according to a Thursday (March 19) earnings release.

Overall, the company saw year-over-year revenue growth of 2%. When revenue from two businesses that Alibaba sold (Sun Art and Intime) is excluded, that figure rises to 9%, according to the release.

The company’s Cloud Intelligence Group, which includes what it calls its “AI + Cloud” businesses, saw its revenue increase 36% year over year, according to a presentation released Thursday.

This business unit’s revenue growth was driven primarily by its public cloud offering, which in turn was driven by the adoption of AI-related products. Alibaba has seen 10 consecutive quarters of triple-digit year-over-year growth in revenue related to AI products, per the presentation.

It was reported Wednesday (March 18) that Alibaba is increasing its AI and computing storage prices by as much as 34%, joining several of its contemporaries in hoping to make the most of heavy demand following major tech investments.

“Cloud and software budgets for enterprise IT services have traditionally represented only around 5% of corporate revenue,” Alibaba Group CEO Eddie Wu said during a Thursday earnings call. “As model-driven agents begin to handle mainstream work tasks across industries, our total addressable market will expand by several multiples.”

Alibaba Group’s eCommerce businesses, which it dubs “consumption businesses,” each saw single-digit growth. Alibaba China E-commerce Group’s revenue was up 6% year over year, while Alibaba International Digital Commerce Group’s revenue was up 4%, according to the presentation.

Within the Alibaba China E-commerce Group, quick commerce revenue increased by 56%, which the company attributed to the rollout of Taobao Instant Commerce in April. Taobao Instant Commerce is an on-demand delivery platform that offers food and beverage, daily necessities, electronics and apparel, according to the company’s website.

Alibaba integrated Taobao Instant Commerce with its consumer-facing AI app Qwen App in January, which added agentic and payments capabilities. In the presentation, the company said this move will further expand the reach of the on-demand delivery platform.

“This quarter, our Quick Commerce business further expanded and scaled with continued share growth, high customer retention and sequential improvement in both unit economics and average order value,” Wu said during the call. “At the same time, Quick Commerce and E-commerce demonstrated clear synergies, driving Taobao app monthly active consumers to double-digit year-over-year growth.”

The company’s “all others” segment recorded a year-over-year revenue decrease of 25%. In the presentation, Alibaba attributed the segment’s decline primarily to the sale of Sun Art and Intime.