Alibaba on Tuesday reported a strong September quarter despite a sharp decline in net profit, supported by a huge hit with its redesigned Qwen AI app and a sharp increase in cloud computing revenue.The Chinese tech giant said its revenue for the three months ended September 30 rose 5% from a year earlier to 247.8 billion yuan ($35 billion), beating analysts’ expectations, AFP reported. U.S.-listed stocks rose after the company said Qwen, a new AI chatbot that rivals DeepSeek and OpenAI’s ChatGPT, had surpassed 10 million downloads in its first week.Chief Executive Officer Eddie Wu said the company is deepening its efforts in artificial intelligence and related infrastructure.“We have entered an investment phase to build long-term strategic value in AI technology and infrastructure,” Wu said.Cloud Intelligence Group’s sales increased by 34% to 39.8 billion yuan, and AI-related products recorded triple-digit growth for nine consecutive quarters.Alibaba has spent about 120 billion yuan on AI and cloud infrastructure in the past four quarters, on top of its previously announced commitment of 380 billion yuan over three years.Net profit attributable to common shareholders decreased 52% to 21 billion yuan, reflecting heavy investments and pressure from new business areas such as instant commerce.Analysts said Qwen’s early traction highlights Alibaba’s competitive advantage in China, where ChatGPT is not available. Crystal Li and Tommy Wong, analysts at China Merchants Securities, said the launch was “supported by Alibaba’s long-term investment and cutting-edge capabilities in fundamental models.”Alibaba’s U.S.-listed shares have risen nearly 90% over the past year, defying concerns that AI stocks are overheating globally. Shares closed 5% higher on Monday following Kwen’s milestone.Emily Jarvie of Proactive Investors said Qwen’s rapid scale-up has made it “one of the fastest-growing AI apps in China.”The company has also received renewed attention in recent weeks following a report in the Financial Times that it provides technical support and user data to Chinese authorities and the military.“The claims and insinuations in the article are completely false,” an Alibaba spokesperson told AFP.Alibaba, which operates some of China’s largest e-commerce and cloud platforms, is positioning itself as a major contender in the global AI race by ramping up investments in models, chips and computing infrastructure.
