When news broke that the Qianwen App had surpassed 10 million downloads in its first week of public beta testing, Alibaba... The group's CEO, Wu Yongming, announced "AI ( Artificial Intelligence) " more than two years ago. The "Driven" strategy has officially entered the stage of implementing its results.
On November 25, Alibaba Group released its financial report for the second quarter of fiscal year 2026, showing that the group's revenue was approximately RMB 247.8 billion. Among them, Alibaba Cloud's quarterly revenue increased by 34%, driven by AI demand and growth in public cloud revenue.
Wu Yongming stated, "We are currently in the investment phase, building an AI technology and infrastructure platform, as well as a large-scale consumer platform that combines lifestyle services and e-commerce to create long-term strategic value. This quarter, we have made significant investments in these areas."
In early 2025, Alibaba announced a 380 billion yuan investment over the next three years in cloud and AI infrastructure development. To date, its consumer-facing (C-end) products, including Qianwen App, Lingguang App, and Quark App, have formed a matrix and been successfully implemented. From infrastructure deployment to technology ecosystem building, and then to scenario-based collaborative implementation, Alibaba is attempting to reshape its business landscape in the AI field through a three-step approach.
A heavy bet under pressure to generate profits: AI core moves towards ecosystem implementation.
The financial report shows that in the second quarter, the group's revenue was approximately RMB 247.8 billion, representing a year-on-year increase of 15% excluding the impact of sold businesses; operating profit was RMB 5.365 billion, a year-on-year decrease of 85%. The report indicates that the profit decline was mainly due to strategic investments in instant retail, user experience, and technology, which were partially offset by growth in core businesses and improved operational efficiency.
Specifically, in the second quarter, Alibaba Cloud Intelligence Group's revenue was RMB 39.824 billion (approximately US$5.594 billion), a year-on-year increase of 34%. This growth momentum was mainly driven by the growth in revenue from public cloud business, including the increased adoption rate of artificial intelligence (AI) related products.
In terms of e-commerce, Alibaba China E-commerce Group's total revenue reached RMB 132.578 billion, a year-on-year increase of 16%. Among them, e-commerce revenue was RMB 102.933 billion, a year-on-year increase of 9%, and customer management revenue was RMB 78.927 billion, a year-on-year increase of 10%. Instant retail revenue increased by 60% year-on-year.
Having recognized the two major opportunities presented by AI and the consumer sector, Alibaba envisions the future of artificial intelligence. Making a profound judgment—At the 2025 Yunqi Conference, Wu Yongming systematically elaborated on the "Road to Super Artificial Intelligence " for the first time, proposing that achieving artificial general intelligence (AGI) is only the starting point, and the ultimate goal is to develop super artificial intelligence (ASI) that can self-iterate and comprehensively surpass humans. This strategic vision is guiding Alibaba from technological infrastructure to ecosystem implementation.
Behind the strategic implementation lies a series of intensive organizational restructuring. (Beijing News Shell) According to multiple sources interviewed by financial reporters, from the end of 2024 to the beginning of 2025, Alibaba completed a key layout for its AI business: the "Tongyi" AI application team was transferred from Alibaba Cloud to the Intelligent Information Business Group, the Tmall Genie team and the Quark team were merged to explore the hardware direction, and a dedicated AI to C team of hundreds of people was formed, which was uniformly managed by Wu Jia, president of Alibaba Intelligent Information Business Group.
Alibaba has also been actively building its technological ecosystem. Through the open-source Qwen series of models, Alibaba has created one of the world's largest AI model families. As of September 2025, Tongyi Qianwen had open-sourced over 300 models. On the investment side, Alibaba completed an $800 million strategic investment in Moonlight's Dark Side in fiscal year 2024, acquiring a 36% stake. It also has investments in MiniMax (Xiyu Technology) and Zhipu AI. Large-scale unicorn head model This has led to a dual-track technology layout of "self-developed technology + investment".
During Alibaba's earnings call with analysts, Wu Yongming stated that Alibaba is simultaneously focusing its efforts on two major areas: AI to B (artificial intelligence for enterprises) and AI to C (artificial intelligence for consumers).
Breaking the deadlock with a thousand questions and accelerating cloud business, Wu Yongming reveals key AI strategic layout.
In February 2025, Wu Yongming officially announced the largest AI infrastructure investment plan in history: over 380 billion yuan will be invested in AI and cloud computing over the next three years. The amount invested in hardware infrastructure exceeds the total amount Alibaba has invested in this area over the past decade.
Financial reports show that this strategic investment has begun to bear fruit. Driven by AI demand and public cloud revenue growth, Alibaba Cloud's quarterly revenue increased by 34%, and revenue from AI-related products has achieved triple-digit year-on-year growth for nine consecutive quarters. The report mentions that during the Yunqi Conference, Alibaba Cloud released a full-stack AI upgrade, from basic AI models to high-performance AI infrastructure and AI development frameworks. Among these upgrades, seven AI models were released, covering language, speech, vision, multimodal, and code model areas.
"Build the computing power highway first, then run the application vehicles." If B2B is the foundation of Alibaba's AI, then B2C represents its future growth potential. Recently, Alibaba officially launched the Qianwen App, fully entering the AI-to-C market, aiming to create a personal AI assistant that can chat and get things done.
According to multiple sources interviewed by the Beijing News Shell Finance, Alibaba's management views the Qianwen App as a "battleground for the future in the AI era." The capabilities of large-scale models have entered the era of Agentic AI (intelligent agent artificial intelligence), which "assists humans," making it the perfect time to create a consumer-facing AI entry point.
The launch of Qianwen App marks Alibaba's official entry into the consumer market with its AI strategy, while the simultaneous launches of Lingguang App and Quark App form a product matrix with complementary scenarios. Wu Yongming revealed in Alibaba's earnings call that the synergy between AI and Alibaba's e-commerce, map, and local services ecosystem holds even greater potential. Based on AI models and Alibaba's ecosystem advantages, Qianwen App is expected to be a pioneer in creating a future AI-driven lifestyle portal. Therefore, while accelerating its growth in AI to B, Alibaba has made the strategic decision to fully enter the AI to C market.
Cumulative capital expenditures over four quarters totaled approximately 120 billion yuan, with AI becoming a key variable in valuation restructuring.
The financial report revealed that Alibaba's core e-commerce business made its first large-scale application of AI during this year's Tmall Double 11 shopping festival to improve merchant efficiency and consumer experience, covering core scenarios such as search, recommendation, advertising, merchant operation tools, and C-end shopping guides. During Double 11, 5 million merchants used AI tools, achieving an average efficiency improvement of 1.5 times. Tmall President Jialuo stated in an interview with Beijing News Shell Finance that Taobao's AI infrastructure system withstood the test this summer, helping Taobao achieve its fastest growth in nearly three years (during the summer).
Qianwen App entered the market with a free strategy, covering mobile, web, and PC platforms, with an international version soon to be launched. As Wu Yongming said, "In the future, almost all tools that connect to the real world will interface with large models, and LLM (Large Language Model) will become the middle layer that carries the interaction and scheduling of users, software, and AI computing resources." Alibaba has high hopes for Qianwen App, which will become a key entry point for this operating system and ultimately lead to the self-iterable super artificial intelligence (ASI).
The financial report shows that Alibaba's capital expenditure in the second quarter was 31.5 billion yuan. Over the past four quarters, Alibaba's capital expenditure on AI + cloud infrastructure has been approximately 120 billion yuan.
During the earnings call with analysts, Wu Yongming stated that Alibaba is simultaneously focusing on both AI to B and AI to C, which will stimulate greater synergy in its core businesses and become a driving force for Alibaba's continued growth and advancement to new heights. According to calculations by a reporter from Beijing News Shell Finance, Alibaba's stock price has risen by over 94% (Hong Kong stock) since the beginning of 2025, with the AI strategy becoming a key variable driving its valuation restructuring.
Alibaba stated that it will continue to invest in building AI technology and infrastructure platforms, as well as a large-scale consumer platform that combines lifestyle services with e-commerce, to create long-term strategic value. It does not rule out making additional investments beyond the already committed 380 billion yuan over three years.
(Article source: Beijing News)
